'"TiSr-'l  SENATE  {>'-"-r 

THE  NATIONAL- BANK  ACT 

AS  AMENDED 

THE  FEDERAL  RESERVE  ACT 

AND 

OTHER  LAWS  RELATING  TO 
NATIONAL  BANKS 


Compiled  under  the  direction  of  the  Comptroller  of  the  Currency 


FEBRUARY,  1920 


t  jjJijy        J 


'  '■'  '•'  y. 

WASHINGTON 
tJOVERNMENT  PRINTING   OFFICE 

1920 


SENATE  RESOLUTION  298. 

Reported  by  Mr.  Moses. 


In  the  Senate  of  the  United  States, 

February  6,  1920. 

Resolved,  That  there  be  printed  one  thousand  five  hundred  copies 

of  the  national  banking  act  as  amended  to  date  for  the  use  of  the 

Senate  document  room. 

Attest: 

George  A.  Sanderson, 

Secretary, 


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CONTENTS 


Page. 
Dates  of  acts  relating  to  National  Banks 5 

^  National-bank  act  and  acts  amendatory  thereof  and  supplementary  thereto 

-^         Bureau  of  Comptroller  of  the  Currency 11 


h  Organization  and  powers 19 

Obtaining  and  issuing  circulating  notes 49 


i;n 


y'           Regulation  of  banking  business 69 

Dissolution  and  receivership 99 

'    Federal  reserve  act 117 

Acts  of  a  general  nature  and  sections  of  the  Revised  Statutes  not  included 

</l      in  national-bank  act  affecting  national  banks ISi 

'^  Special  acts  relating  to  national  banks 207 

i^  Opinions  of  Attorney  General  on  guaranty  laws  of  Oklahoma  and  Kansas 

^       and  on  the  insurance  of  bank  deposits 215 

■^  Index  to  national-bank  act  and  general  and  special  acts 221 

"^  Index  to  Federal  reserve  act 273 

Q   Index  to  sections  of  Revised  Statutes 302 

3 


;i7r>Hi)4 


DATES  OF  ACTS  RELATING  TO  NATIONAL 

BANKS. 


THE    NATIONAL    BANK    ACT    AND    ACTS    AMENDATORY    THEREOF    AND    SUPPLEMENTARY 

THERETO. 

Page. 

Feb.  25, 1S63.  An  act  to  provide  a  national  currency  secured  by  a  pledge 
of  United  States  stocks,  and  to  provide  for  the  circula- 
tion and  redemption  thereof 181 

June   3, 1864.  Act   of  February  25,   1863,   repealed   and  reenacted   with 

certain    amendments 11-113, 131, 181, 182 

Mar.    3, 1865.  State  banks  converted  may  retain  and  keep  in  operation 

branches 43 

Mar.    3, 1865.  Issue  of  circulating  notes.     See  note  under  section  5171 59 

Feb.     5, 1867.  Penalty  for  imitating  bank  circulation 66, 178 

Mar.    2, 1867.  Refunding  excess  tax 94 

Feb.  10, 1868.  Taxation  of  shares  of  national-bank  stock 95 

Feb.  19, 1869.  Prohibiting  loans  on  United  States  or  national-bank  notes, 

or  withholding  such  notes  from  use 85 

Mar.    3, 1869.  Reports  of  condition,  and  earnings  and  dividends 90,  91,  92 

Mar.    3,1869.  False  certification  of  checks 86 

Apr.     6, 1869.  Penalty  for  embezzlement,  abstraction,  etc 87 

July    8, 1870.  Penalty  for  embezzlement,  abstraction,  etc 87 

July  12, 1870.  Issue  of  circulation  redeemable  in  gold 65,  80 

July  14, 1870.  Liquidating  banks  to  retire  circulation 100 

Mar.    1, 1872.  Leavenworth  struck  out  as  reserve  city 1 72 

June   8,1872.  Certificates  of  deposit  for  United  States  notes   (repealed 

Mar.  14,  1900) 80 

Feb.  19,1873.  Reports  of  State  banks 18 

Mar.    3, 1873.  Examination  of  plates  and  dies 62 

Mar.    3, 1873.  Assessment  for  impairment  of  capital 83 

Mar.    3, 1873.  Use  of  the  word  "  national  " 118 

June  20, 1874.  Fixing  the  amount  of  United  States  notes,  providing  for  a 

redistribution  of  national-bank  currency 20,  61,  77, 102 

June  23, 1874.  Maceration  of  United  States  and  national-bank  notes 64 

June  23, 1874.  Stamps  on  bank  checks.     Repealed  March  3,  1883. 

Jan.  14, 1875.  Aggregate  amount  of  circulation  not  limited 63 

Jan.  19, 1875.  Circulating  notes  of  national  gold  banks 64 

Feb.  18, 1875.  Correcting  errors  and  omissions  in  the  Revised  Statutes 13, 

14,  63,  81, 101, 103 

Feb.  19, 1875.  Appointment  and  compensation  of  bank  examiners 112 

Mar.    3, 1875.  Salary  of  Comptroller 11 

Mar.    3,1875.  Distinctive  paper  for  printing  notes 61 

Mar.    3, 1875.  Clerical  force  for  redemption  of  circulating  notes 78 

June  30, 1876.  Assessment  for  failure  to  pay  up  capital  .stock  or  for  im- 
pairment of  capital ;  receivers,  appointment  of 83, 107-110 

Feb.  27, 1877.  Examination  of  plates  and  dies 62 

Feb.  27,1877.  Reports  to  Comptroller 91 

Feb.  27, 1877.  Destruction  of  redeemed  notes 102 

Mar.    1, 1879.  Semiannual  duty,  abatement  of 94 

Feb.  14, 1880.  Conversion  of  gold  banks 65 

Feb.  26,1881.  Verification  of  returns  of  national  banks 91 

July  12, 1882.  Corporate  existence,  extension  of 28-31 

July  12.1882.  Issue  of  gold  certificates 85 

July  12, 1882.  Punishment  for  falsely  certifying  check 86 

July  12,1882.  Retirement  of  circulating  notes 55,56 

Mar.    3,1883.  Capital  and  deposits,  repealing  tax  on 91,176,178 

Mar.  29, 1886.  Insolvent    banks,    protection    of   assets   by    use    of    trust 

funds 110.  Ill 


6  DATES   OF   ACTS  RELATING  TO   NATIONAL  BANKS. 

Page. 
May  1, 1886.  Increase  of  capital  stock,  change  of  name  or  location—  27,  28,  34 
Mar.    3,1887.  Courts,  jurisdiction  of 28 

Jlar.    3. 1887.  Reserve  and  central  reserve  cities,  providing  for  additional. 

etc 70-73 

Aug.  13, 1888.  Courts,  jurisdiction  of 28 

July  14, 1890.  Disposition  of  redemption  account 79 

July  28, 1892.  Stolen  or  lost  national-bank  notes,  redemption  of 79 

Aug.    3, 1892.  Agent  of  shareholders  of  national  bank,  appointment  of ; 

amends  act  of  June  30,  1876 108 

Jan.  12, 1895.  Annual  Report  of  Comptroller  of  the  Currency,  printing  of_        15 
Mar.    2, 1897.  Appointment    and    qualification    of    shareholders'    agent ; 

amends  acts  June  30,  1876,  and  August  3,  1892 108 

Mar.  14, 1900.  Authorizing  banks  with  minimum  capital  $25,000 ;  bonds, 

circulation,  taxation,  etc 32,  60,  92 

Mar.    3, 1901.  National-bank  depositaries 42 

Apr.  12, 1902.  Authorization  of  reextension  of  charter 32 

Apr.  •28, 1902.  Annual  Report  of  Comptroller  to  contain  information  re- 
garding failed  banks,  list  of  employees,  etc 14 

Mar.    3, 1903.  Additional  reserve  cities  ;  minimum  population,  25,000 72 

Feb.  28, 1905.  Qualification  of  directors,  banks  with  capital  of  $25,000 35 

Dec.  21, 1905.  Taxation  of  circulation  based  on  Panama  Canal  bonds 51 

June  22, 1906.  Amendment  section  5200,  loan  limitation 81 

Jan.  26, 1907.  Political  contributions  prohibited 87 

Mar.    4, 1907.  Additional  copies  of  Report  of  Comptroller 15 

Mar.    4, 1917.  Public   depositaries 42 

Gold  certificates  and  United  States  notes,  issue  of 192 

Limitation  on  withdrawal  of  circulation ;  consent  of  Comp- 
troller of  Currency  and  the  Secretary  of  the  Treasury 

neces.sary 56 

May  22, 1908.  Additional  Deputy  Cmptroller 12 

May  30, 1908.  Authorizing  National  Currency  Associations,  the  issue  of 
additional  bank  circulation,  and  creating  a  National  Mon- 
etary Commission.     Expired  June  30,  1915. 

Mar.    4, 1909.  Codification  of  criminal  laws 66, 179, 182, 185, 186, 187, 188 

Mar.    4, 1909.  Additional  Deputy  Comptroller 12 

Oct.    15,1914.  Interlocking  directorates 35-39 

May  15, 1916.  Amending  act  of  October  15,  1914,  relating  to  interlocking 

directorates 36 

May  15, 1916.  Authorizing  the  deposit  of  funds  of  insolvent  banks  in  any 

regular  Government  depositary 105 

Sept.  7, 1916.  Amending  laws  in  reference  to  real  estate  loans,  reserves, 
acceptances,  and  foreign  branches,  and  authorizing  bank 
to  act  as  insurance  agent  and  as  agent  in  procuring  loans 

on   real  estate 21,23,24,25 

Apr.  24, 1917.  No  reserve  required  to  be  held  against  United  States  de- 
posits  77, 190 

Oct.     5, 1917.  Limit  of  issue  of  notes  under  $5 62 

Apr.     5, 1918.  Liabilities  incurred  under  war  finance  act,  excepted  from 

restrictions  of  section  5202 85 

May  22, 1918.  Authorizes  contributions  to  Red  Cross  during  period  of  the 

war 198 

Sept.  24, 1918.  Amend  section  5200,  Revised  Statutes.  Limitation  of  lia- 
bilities that  may  be  incurred  by  any  one  person 81 

Sept.26, 1918.  Trust  company  powers  of  national  hanks.  Reserve  require- 
ments. Amends  section  5208,  penalty  for  falsely  certify- 
ing checks.  Amends  section  5209,  penalty  for  embezzle- 
ment, abstraction,  willful  misapplication,  false  entries. 

etc.     Amends  section  22.  Federal  reserve  act 24,  75,  86,  87 

Nov.    7, 1918.  Consolidation  of  national  banks 100 

Mar.    3, 1919.  Amends  section  5172,  printing  denomination  and  forms  of 

circulating  notes 61 

Oct.   22,1919.  Amending  sections  .5200  and  5202,  U.  S.  R.  S 81.87 

Jan.  13,1920.  Amending  section  5182,  U.  S.  R.  S 63 


DATES   OF   ACTS   RELATING   TO    NATIONAL   BANKS.  7 

THE  FEDEBAL  RESEB\'E  ACT. 

Page. 

Dec.  23, 1913.  Providing  for  the  establishment  of  Federal  reseve  banks, 
to  furnish  an  elastic  currency,  to  afford  means  of  redis- 
counting  commercial  paper,  to  establish  a  more  effective 
supervision  of  banking  in  the  United  States,  and  for 
other    purposes—  11,  21,  22,  23,  25,  34,  41,  42,  43,  50,  56-58,  74-76, 

83,  87,  88,  89, 112, 117-177, 189 

Aug.  4, 1914.  Amending  section  27  of  the  Federal  reserve  act  and  section 
9  of  the  act  of  May  30,  1908,  relative  to  issuance  of  addi- 
tional   circulation 175, 176 

Aug.  15, 1914.  Amending  section  19  of  the  Federal  reserve  act  In  reference 

to  reserve  requirements 75,  76, 159, 160 

Mar.  3, 1915.  Amended  paragraphs'3,  4,  and  5  of  section  13  of  Federal  re- 
serve act  superseded  by  act  of  September  7,  1916 22, 145 

Sept.  7, 1916.  Amends  sections  11,  13.  14,  16,  24,  and  25  of  the  Federal  re- 
serve act  and  section  5202,  United  States  Revised  Stat- 
utes     21,  22,  23,  25, 143, 144, 145, 146, 147, 149, 165 

June  21, 1917.  Amends  sections  3,  4,  9,  13.  14,  16,  17,  19,  and  22  of  the  Fed- 
eral reserve  act—  22,  50,  74-76.  87,  88,  89.  90, 123, 128, 132-135, 
143, 145. 148, 149, 150, 151, 152, 155, 156. 159, 160 

Sept.  26, 1918.  Amends  section  22,  Federal  reserve  act 24,75,85,86,87.88, 

90, 127, 140, 153, 159, 162. 163, 164 

Mar.    3, 1919.  Amends  sections  7,  10,  and  11,  Federal  reserve  act—  131, 136, 142 

Sept.  17, 1919.  Amending  section  25,  Federal  reserve  act 25. 165 

Dec.  24, 1919.  Amending  section  25,  Federal  reserve  act 167 

ACTS  OF  A  GENEEAI-  NATURE  AFFECTING  NATIONAL  BANKS. 

Feb.  21,1857.  Foreign    coins 186 

July    7, 1838.  Issuing  circulation  of  expired  association 194 

June  30, 1864.  Taxation  of  State  banks 183,184 

Mar.    3,186.5.  Taxation  of  State  banks 182,184 

July  13, 1866.  Taxation  of   State  banks 182, 183, 184 

Mar.  26. 1867.  Taxation  of  State  banks 183 

June   6, 1872.  Taxation  of  State  banks 183 

Dec.  24,1872.  Taxation   of   State  banks 183,184 

Feb.     8,1875.  Taxation  of  State  banks 183 

Feb.  18, 1875.  Taxation  of  State  banks 184 

Mar.    1. 1879.  Taxation  of  State  banks 185 

Feb.  25, 1862.  Taxation  of  notes  and  certificates  of  United  States  circulat- 
ing  as   currency 185 

Mar.    3, 1863.  Taxation  of  national-bank  notes  and  notes  and  certificates 

of  United  States  circulating  as  currency 185 

Mar.    3, 1864.  Taxation  of  national-bank  notes  and  notes  and  certificates 

of  United  States  circulating  as  currency 185 

June  30, 1864.  Taxation  of  national-bank  notes  and  notes  and  certificates 

of  United  States  circulating  as  currency 185 

Jan.  28, 1865.  Taxation  of  national-bank  notes  and  notes  and  certificates 

of  United  States  circulating  as  currency 185 

Mar.    3, 1865.  Taxation  of  national-bank  notes  and  notes  and  certificates 

of  United  States  circulating  as  currency 185 

July  14, 1870.  Taxation  of  national-bank  notes  and  notes  and  certificates 

of  United  States  circulating  as  currency 185 

Aug.  13, 1894.  Taxation  of  national-bank  notes  and  notes  and  certificates 

of  United  States  circulating  as  currency 185 

July  17, 1862.  Restriction  on  notes  less  than  one  dollar 185 

Feb.  21, 1857.  Foreign  coins  not  legal  tender ISO 

July  17, 1861.  Demand  Treasury  notes  legal  tender  same  as  United  States 

notes 187 

Feb.  12, 1862.  Demand  Treasury  notes  legal  tender  same  as  United  States 

notes 186, 187 

Feb.  25, 1862.  Demand  Treasury  notes  legal  tender  same  as  United  States 

notes 186, 187 

Feb.  25, 1862.  United  States  notes  legal  tender  except  for  duties  on  Im- 
ports and  interest  on  public  debt 187 

Mar.  17, 1862.  Demand  Treasury  notes  legal  tender  same  as  United  States 

notes 187 


8 


DATES   OF   ACTS   RELATING   TO    NATIONAL   BANKS. 


Page. 
July  11, 1862.  United  States  notes  legal  tender  except  for  duties  on  im- 
ports and  interest  on  public  debt 186 

Jan.  17, 1863.  United  States  notes  legal  tender  except  for  duties  on  im- 
ports and  interest  on  public  debt 187 

Mar.    3, 1863.  United  States  notes  legal  tender  except  for  duties  on  im- 
ports and  interest  on  public  debt 187 

Mar.    3. 1863.  Interest-bearing  notes  legal  tender  to  same  extent  as  United 

States  notes 187 

June  30,1864.  Interest-bearing  notes  legal  tender  to  same  extent  as  United 

States  notes 187 

Feb.  12, 1S73.  Gold  coins  of  United  States  legal  tender 186 

Feb.  12, 1873.  Minor  coins  of  United  States  legal  tender  to  amount  of 

twenty-five    cents 186 

Feb.  28. 1878.  Standard  silver  dollar  legal  tender 186 

Feb.  28, 1878.  Silver  certificates 199 

June   9, 1879.  Subsidiary  silver  coins  legal  tender  to  amount  not  exceed- 
ing ten  dollars 186 

Mar.    3.  1887.  Silver  certificates 199 

July  12. 1882.  Gold  certificates,  for  what  receivable 187 

July    1. 1902.  Philippine  coinage 186 

Mar.    2, 1903.  Philippine    coinage 186 

Mar.  14, 1900.  Currency    act 195-201 

Mar.    4, 1907.  Amending  national-bank   act 198.  201 

June  14, 1866.  Government   depositories 188,191 

June    8, 1872.  Government   depositories 188 

Mar.    3, 1873.  Government  depositories 188 

Feb.  27, 1877.  Government  depositories 188 

Feb.     3, 1879.  Government  depositories 191 

Mar.    2, 1907.  Government  depositories 188 

May  27, 1908.  Government    depositories 188 

Mar.    4, 1909.  Misappropriating  postal   funds 189 

Mar.    4, 1909.  Government  depositories 191 

Feb.  2.5. 1863.  Counterfeiting  national-bank  notes 192 

June    3, 1864.  Counterfeiting  national-bank  notes 192 

June  30, 1864.  Forging  or  counterfeiting  United  States  securities 192 

June  30. 1864.  Using  plates  to  print  without  authority 192 

Feb.     5, 1867.  Penalty  for  taking  unauthorized  impression  of  tools  having 

such  impression  or  dealing  in  counterfeit  circulation 194 

Mar.    4, 1909.  Counterfeiting  national-bank  notes 192, 193. 194 

June  30, 1876.  Fraudulent  notes  to  be  so  marked  by  United  States  officers 

and  officers  of  national  banks 195 

Aug.    5, 1909.  Panama  Canal  bonds,  issue  of,  authorized  at  3  per  cent 201 

Mar.    2, 1911.  Panama  Canal  bonds  under  act  of  August  5,  1909,  not  avail- 
able as  secui'ity  for  circulation 203 

JIar.    2, 1911.  Issue   of  gold   certificates  on  deposit  of  foreign   coin   or 

bullion 198 

Mar.    2, 1911.  Certified  checks  drawn  on  national  and  State  banks  receiv- 
able for  duties  on  imports  and  internal  taxes 198,  203 

Mar.    3, 1911.  Jurisdiction  of  United  States  district  courts 181 

Mar.    3, 1913.  Certified  checks  on  national  and   State  banks  and   trust 
companies  receivable  in  payment  for  duties  on  imports, 

internal  taxes,  and  all  public  dues 204 

June  12, 1916.  Issue  of  gold  certificates 198 

July  17, 1916.  Government  deposits  in  Federal  land  banks 190 

Apr.  24, 1917.  Deposit  of  proceeds  arising  from  sale  of  bonds.     No  reserve 

required  to  be  held  against  United  States  deposits 190 

May  22, 1918.  National  banks  authorized  to  subscribe  to  American  Red 

Cross  during  the  war 204 

Dec.  24,1919.  Gold  certificates  made  legal  tender 187 

SPECIAT.   ACTS   RELATING   TO   NATIONAL   BANKS. 

Apr.  12, 1900.  National  banking  laws  extended  to  Porto  Rico 207 

Apr.  30. 1900.  National  hanking  laws  extended  to  Hawaii 207 

Feb.  26,  1913.  Granting  Fifth-Third  National  Bank  of  Cincinnati  charter 

No.  20 208 

Fifty-seven  acts  changing  the  location  or  name,  or  both,  of  various  na- 
tional banks 208-211 


BUREAU  OF  THE  COMPTROLLER  OF  THE 

CURRENCY. 


THE  .\ATIONAL-BAXK  ACT  AKP  ACTS  AMENDATORY  THEREOF 
AiND  SUPPLEME.NTARY  THERETO. 


CHAPTER  I. 


BUREAU  OF  THE   COMPTROLLER  OF  THE   CURRENCY. 


100.  324 


101. 
102. 


104. 

105. 
106. 


325, 
326 


103.  327 


107.  330 

108.  331, 


109.  332 


Bureau  of  the  Comptroller  of 

the  Currency. 
Comptroller  of  the  Currency. 
Qualification  of  Comptroller 

of  the  Currency.     Amount 

of  bond. 
Deputy    Comptroller    of    the 

Currency. 
Additional  Deputy  Comptroller  of 

the  Currency. 
Clerks. 
Interest    in    national    banks 

prohibited. 
Seal   of   Comptroller   of  the 

Currency. 
Rooms,  vaults,  and  furniture 

for  Currency  Bureau. 
Banks  other  than  national  in 


328. 
329. 


District  of  Columbia.  (See 
sec.  714,  Code  District  of 
Columbia.) 

110.  333.  Report  of  Comptroller. 

111.  Act    April    28,    1902.     Report    of 

Comptroller  to  give  com- 
plete list  of  all  employees 
of  the  office,  information 
about  failed  banks,  em- 
ployees under  receivers, 
etc. 

112.  Act  January  12,  1895.    Number  of 

copies  of  report  to  be 
printed. 

113.  Joint    resolution    March    4,    1907. 

Three  thousand  additional 
copies  authorized  to  be 
printed. 


BUREAU  OF  THE  COMPTROLLER  OF  THE  CURRENCY. 

100.  Sec.  324.— There  shall  be  in  the  Department  of  the^  A^ct  June  s. 
Treasury  a  bureau  charged  with  the  execution  of  all  la^YSsec.  i ;  is  stat.' 
passed  by  Congress  relating  to  the  issue  and  regulation  of  ^-j^^f;  ^^^  03 
a  national  currency  secured  by  United  States  bonds  and,i9i3,  sec. 'lo- 
under  the  general  supervision  of  the  Federal  Reserve  200. 
Board,  of  all  Federal  reserve  notes,  the  chief  officer  of 

wliich  bureau  shall  be  called  the  Comptroller  of  the  Cur- 
rency and  shall  perform  his  duties  under  the  general 
directions  of  the  Secretary  of  the  Treasury. 

COMPTROLLER  OF  THE  CURRENCY. 

101.  Sec.  325.— The  Comptroller  of  the  Currency  shall  ^g^^*  ^c""%^' 
be  ai^pointed  by  the  President,  on  the  recommendation  of  sec.  i;  I's  stat." 
the  Secretary  of  the  Treasury,  by  and  with  the  advice  Act' Mar.  .3, 
and  consent  of  the  Senate,  and  shall  hold  his  office  for  the  lfp:_, .  ^g  g\^^- 
term  of  five  years  unless  sooner  removed  by  the  Presi- l.,'398. 
dent,  upon  reasons  to  be  communicated  by  him  to  the 

Senate ;  and  he  shall  be  entitled  to  a  salary  of  five  thou- 
sand dollars  a  3'ear. 

Note. — Section  10  of  the  Federal  reserve  act  provides  that  the 
Comptroller  of  the  Currency  shall  be  an  ex  ofiicio  member  of  the 
Federal  Reserve  Board  and  sh;ill,  in  addition  to  his  salary  as 
Comptroller,  receive  the  sum  of  $7,UUU  annually  lor  his  service  on 
RUid  board. 

U 


12  BUREAU   OF   THE   COMPTROLLER  OF   THE   CURRENCY. 

QUALIFICATION  OF  COMPTROLLER  OF  THE  CURRENCY. 
AMOUNT  OF  BOND. 

Act  June  3.  102.  Scc.  326. — The  Comptroller  of  the  Currency  shall, 
sec.  i ;  13  Stat!  withiii  fifteen  clays  from  the  time  of  notice  of  his  appoint- 
L.,  99.  ment,  take  and  subscribe  the  oath  of  office ;  and  he  shall 

give  to  the  United  States  a  bond  in  the  penalty  of  one 
hundred  thousand  dollars,  with  not  less  than  two  respon- 
sible sureties,  to  be  approved  by  the  Secretary  of  the 
Treasury,  conditioned  for  the  faithful  discharge  of  the 
duties  of  his  office. 

DEPUTY  COMPTROLLER  OF  THE  CURRENCY. 

Act  Jnne  3,  103.  Sec.  327. — There  shall  be  in  the  Bureau  of  the 
sec^^i ;  13  s\at.'  Comptroller  of  the  Currency  a  Deputy  Comptroller  of  the 
^■>  99'  Currency,  to  be  appointed  by  the  Secretary,  who  shall  be 

entitled  to  a  salary  of  two  thousand  five  hundred  dollars 
a  year,  and  who  shall  possess  the  power  and  perform  the 
duties  attached  by  law  to  the  office  of  Comptroller  dur- 
ing a  vacancy  in  the  office  or  during  the  absence  or  ina- 
bility of  the  Comptroller.  The  Deputy  Comptroller  shall 
also  take  the  oath  of  office  prescribed  by  the  Constitution 
and  laws  of  the  United  States,  and  shall  give  a  like  bond 
in  the  penalty  of  fifty  thousand  dollars. 

NoTE.^The  salary  of  the  Deputy  Comptroller  has  been  fixed  at 
various  amounts  by  different  appropriation  bills,  as  follows:  Act 
March  3,  1875  (sundry  civil  bill),  18  Stat.  L.,  398,  $3,000;  act 
March  3,  1901,  31  Stat.  L.,  978,  $2,800;  act  March  18,  1904,  33 
Stat.  L.,  103,  $3,000 ;  act  February  3,  1905,  33  Stat.  L.,  649,  and  all 
subsequent  acts,  $3,500. 

ADDITIONAL  DEPUTY  COMPTROLLER  OF  THE  CURRENCY. 

1908*  ^ay^^22,      104.  Deputy  Comptroller,  $3,500;  Deputy  Comptroller, 
L.,  203.  $3,000,  who  shall  be  appointed  by  the  Secretary  of  the 

1909,*^  3^5^stat!  i'l'^^sury,  and  shall  possess  the  power  and- perform  the 
L.,  867.  duties  attached  by  law  to  the  office  of  Comptroller  dur- 

ing a  vacancy  in  the  office  of  Comptroller  and  Deputy 
Comptroller  or  during  the  absence  or  inability  of  the 
Comptroller  and  the  Deputy  Comptroller,  and  said  assist- 
ant Deputy  Comptroller  shall  give  a  like  bond  in  the  pen- 
alty of  fifty  thousand  dollars. 

Note. — The  additional  Deputy  Comptroller  was  first  provided 
for  in  the  act  of  May  22,  1908. 

CLERKS. 

Act  June  3,  105.  Scc.  328. — The  Comptroller  of  the  Currency  shall 
iec.^i ;  ^13  s\at;  employ,  from  time  to  time,  the  necessary  clerks,  to  be 
L.,  100.  appointed  and  classified  by  the  Secretary  of  the  Treas- 

ury, to  discharge  such  duties  as  the  Comptroller  shall 
direct. 


BUREAU   OF   THE   COMPTROLLER  OF   THE   CURRENCY.  13 

INTEREST  IN  NATIONAL  BANKS  PROHIBITED. 

106.  Sec.  329.— It  shall  not  be  lawful  for  the  Comptrol-  ^^Act  Janets, 
ler  or  the  Deputy  Comptroller  of  the  Currency,  either  sec.  1 ;  i3  stat! 
directly  or  indirectly,  to  be  interested  in  any  association  ^'  ^^^' 
issuing  national  currency  under  the  laws  of  the  United 

States. 

Note. — Section  10  of  the  Federal  reserve  act  provides  In  part 
that  no  member  of  the  Federal  Reserve  Board  shall  be  an  officer 
or  director  of  any  bank,  banking  institution,  trust  company,  or 
Federal  reserve  bank,  nor  hold  stock  in  any  bank,  banking  institu- 
tion, or  trust  company.  As  the  Comptroller  of  the  Currency  is  a 
member  of  the  board,  he  is  thus  prohibited  from  being  connected 
as  an  officer  or  shareholder  with  any  bank,  banking  institution, 
or  trust  company,  whether  State  or  national.  It  would  appear 
that  under  section  329  a  Deputy  Comptroller  of  the  Currency 
would  be  prohibited  from  being  interested  not  only  in  any  national 
bank  but  in  any  State  bank  that  should  become  a  member  bank 
and  a  shareholder  in  one  of  the  Federal  reserve  banks. 

SEAL  OF  COMPTROLLER  OF  THE  CURRENCY. 

107.  Sec.  330  [as  amended  1875]. — The  seal  devised  by^^Aa  J"np  3, 
the  Comptroller  of  the  Currency  for  his  office,  and  ap-  sec.  ^ ;  13  stat! 
proved  by  the  Secretary  of  the  Treasury,  shall  continue  to  ^"Act.'^Feb.  is, 
be  the  seal  of  office  of  the  Comptroller,  and  may  be  re-  isjs.  £•  ^o\  is 
newed  when  necessary.    A  description  of  the  seal,  with    ^  •    •• 

an  impression  thereof,  and  a  certificate  of  approval  by  the 
Secretary  of  the  Treasury,  shall  be  filed  in  the  office  of 
the  Secretary  of  State. 

ROOMS,  YAULTS,  AND  FURNITURE  FOR  CURRENCY 
BUREAU. 

108.  Sec.  331. — There  shall  be  assigned,  from  time  to  Act  June  3, 
time,  to  the  Comptroller  of  the  Currency,  by  the  Secretary  gee.  3 ;  13  stat. 
of  the  Treasury,  suitable  rooms  in  the  Treasury  building  ^''  ^^o. 

for  conducting  the  business  of  the  Currency  Bureau,  con- 
taining safe  and  secure  fireproof  vaults,  in  which  the 
Comptroller  shall  deposit  and  safely  keep  all  the  plates 
not  necessarily  in  the  possession  of  engravers  or  printers, 
and  other  valuable  things  belonging  to  his  department; 
and  the  Comptroller  shall  from  time  to  time  furnish  the 
necessary  furniture,  stationery,  fuel,  lights,  and  other 
proper  conveniences  for  the  transaction  of  the  business  of 
his  office. 

109.  Sec.  332.— 

Refers  entirely  to  banks  other  than  national  in  the  District  of 
Columbia  and  is  Incorporated  In  section  714  of  the  Code  of  the 
District  of  Columbia  and  has  been  repeatedly  amended. 

REPORT  OF  COMPTROLLER. 

110.  Sec.  333  [as  amended  1875].— The  Comptroller  of 
the  Currency  shall  make  an  annual  report  to  Congress,  at 
the  commencement  of  its  session,  exhibiting — 

First.  A  summary  of  the  state  and  condition  of  every     Act  .Tnno  3, 

*■  1  ft  ft  .1        e  d^        ft  1    • 

association  from  which  reports  have  been  received  the  13    'stat.'    l.! 
preceding  year,  at  the  several  dates  to  which  sucli  reports  ^i"^- 


14  BL'REAU   OF   THE    COMPTROLLEE   OF   THE    CUEEENC"?. 

ic--*'  Ffi*"  ^^:  refer,  with  an  abstract  of  the  whole  amount  of  bankihs: 

lo(  o,     sec.     i;  .   '  ^  111  PI  11  !•     T      • 

17  Stat.  L.,  capital  returned  b}'  them,  or  the  whole  amount  oi  their 
^^Act.  Feb.  IS,  debts  and  liabilities,  the  amount  of  circulating  notes  out- 
stat '  L  ^siV^^  standing,  and  the  total  amount  of  means  and  resources, 
specifying  the  amount  of  lawful  money  held  by  them  at 
the  times  of  their  several  returns,  and  such  other  informa- 
tion in  relation  to  such  associations  as,  in  his  judgment, 
may  be  useful. 

Second.  A  statement  of  the  associations  whose  business 
has  been  closed  during  the  year,  with  the  amount  of  their 
circulation  redeemed  and  the  amount  outstanding. 

Third.  Any  amendment  to  the  laws  relative  to  banking 
by  which  the  system  may  be  improved,  and  the  security 
of  the  holders  of  its  notes  and  other  creditors  may  be 
increased. 

Fourth.  A  statement  exhibiting  under  appropriate 
heads  the  resources  and  liabilities  and  condition  of  the 
banks,  banking  companies,  and  savings  banks  organized 
under  the  laws  of  the  several  States  and  Territories ;  such 
information  to  be  obtained  by  the  Comptroller  from  the 
reports  made  by  such  banks,  banking  companies,  and 
savings  banks  to  the  legislatures  or  officers  of  the  different 
States  and  Territories,  and,  where  such  reports  can  not 
be  obtained,  the  deficiency  to  be  supplied  from  such  other 
authentic  sources  as  may  be  available. 

Fifth.  The  names  and  compensation  of  the  clerk's  em- 
ployed by  him.  and  the  whole  amount  of  the  expenses  of 
the  banking  department  during  the  j^ear. 

COMPTROLLER  TO  GIYE  COMPLETE  LIST  OF  ALL  EM- 
PLOYEES OF  THE  OFFICE.  INFORMATION  ABOUT 
FAILED  BANKS,  EMPLOYEES,  UNDER  RECEIYERS, 
ETC.     ACT  APRIL  28,  1902. 

Act  April  28,  HI.  Provided,  That  for  the  fiscal  year  of  nineteen  him- 
tiye''executtvlidred  and  two  and  thereafter,  a  full  and  complete  list  of 
p°^o^p1-^fa  tkfn  ^^1  officers,  agents,  clerks,  and  other  employees  of  the 
act;  32  Stat. office  of  the  Comptroller  of  the  Currency,  including  bank 
examiners,  receivers  and  attorneys  for  receivers,  and 
clerks  employed  by  such  examiners  and  receivers,  or  any 
other  person  connected  with  the  work  of  said  office  in 
Washington  or  elsewhere,  whose  salary  or  compensation 
is  paid  from  the  Treasury  of  the  United  States  or  as- 
sessed against  or  collected  from  existing  or  failed  banks 
under  their  supervision  or  control,  shall  be  transmitted  to 
the  Secretary  of  the  Interior  in  accordance  with  the  pro- 
visions of  an  Act  of  Congress  approved  January  twelfth, 
eighteen  hundred  and  eighty-five,  relating  to  the  Official 
Eegister :  And  provided  further,  That  the  Comptroller  of 
the  Currency  is  hereby  directed  to  include  in  his  annual 
report  to  the  Speaker  of  the  House  of  Representatives, 
expenses  incurred  during  each  year,  in  liquidation  of  each 
failed  national  bank  separately. 


BUREAU   OF   THE   COMPTROLLER   OF   THE    CURRENCY.  15 

NUMBER  OF  COPIES  OF  REPORT  TO  BE  PRINTED.     ACT 
OF  JANUARY  12,  1895. 

112.  Sec.  73. — This  section  provides  in  part  that  there  ^^^ct  -Ta^n  ..ij-'. 
shall  be  printed  "Of  the  annual  report  of  the  Comp-28  stiat'.  L.',6i6! 
troller  of  the  Currency,  ten  thousand  copies;  one  thou- 
sand for  the  Senate,  two  thousand  for  the  House,  and 

seven  thousand  for  distribution  by  the  Comptroller  of 
the  Currency." 

THREE  THOUSAND  ADDITIONAL  COPIES  AUTHORIZED  TO 
BE  PRINTED.     PUBLIC  RESOLUTION  NO.  25,  MARCH  4, 

1907. 

113.  That  section  73  of  an  act  "  Providing  for  the  pub-  uf^^^^oi'; 
lie  printing  and  binding,  and  the  distribution  of  public  34  stiit.  l.) 
documents,"  approved  January  12,  1895,  be,  and  the  same 

is  hereby,  so  amended  as  to  authorize  the  printing  annu- 
ally hereafter  of  ten  thousand  copies  of  the  annual  report 
of  the  Comptroller  of  the  Currency,  for  distribution  by 
the  Comptroller  of  the  Currency,  instead  of  seven  thou- 
sand copies  as  heretofore. 


16  BUREAU   or   THE   COMPTROLLEK   OF   THE   CUREENCy. 


ORGANIZATION  AND  POWERS. 


164312°— 20 2  17 


CHAPTER  11. 


ORGANIZATION    AND   POWERS. 


200.  Act  June  20,  1874.  The  national- 
bank  act. 

SOI.  5133.  Formation  of  national 
banking  associations. 

202.  5134.  Requisites    of    organization 

certificate. 

203.  5135.  How  certificate  shall  be  ac- 

knowledged and  filed. 

204.  5136.  Corporate   powers    of   asso- 

ciations. 

205.  Acts  December  23,  1913,  and  Sep- 

tember 7,  1916.  Loans 
on  improved   real   estate. 

206.  Act  December  23,  1913,  as  amend- 

ed. When  national  bank 
as  a  member  of  Federal 
reserve  system  may  ac- 
cept drafts  or  bills  of  ex- 
change. 

207.  Act    September   7,   1916.     Accept- 

ance of  drafts  or  bills  of 
exchange  drawn  upon  na- 
tional banks  by  banks  or 
bankers  in  foreign  coun- 
tries or  dependencies  of 
the  United  States. 

208.  Act  December  23,  1913,  as  amend- 

ed. Trust  company  pow- 
ers of  national  banks. 

209.  Act  September  7,  1916.     Power  of 

national  bank  to  act  as 
Insurance  agent  or  as 
broker  or  agent  in  making 
or  procuring  loans  on  real 
estate. 

210.  Act  December  23,  1913,  as  amend- 

ed.    Foreign  branches. 

211.  Act    May    1.    1886.      Change    of 

name   and    location. 

212.  Act  May  1,  1886.     Debts  not  af- 

fected by  change. 

213.  Act    May    1,    1886.      No    release 

from  liabilities. 

214.  Act    August    13,    1888.     National 

banks  deemed  citizens  of 
State  in  which  located. 

215.  Act  July  12,  1882.     Extension  of 

corporate  existence. 

216.  Act    July    12,    1882.     Consent    of 

two-thirds    necessary. 

217.  Act   July    12,    1882.     Special   ex- 

amination of  bank  and 
issue  of  certificate  of  ap- 
proval by  Comptroller. 

218.  Act    July    12,    1882.     Status    not 

changed  by  extension. 
Jurisdiction  of  suits  by 
or  against  national  banks. 

219.  Act    July    12,    1882.     Dissenting 

shareholders  may  with- 
draw. 

220.  Act   July    12,   1882.     Redemption 

of  circulating  notes  is- 
sued  prior   to   extension. 


221.  Act    July    12,    1882.     Dissolution 

of  banks  not  extending 
period  of  succession. 

222.  Act  April  12,  1902.     Reextension 

of  corporate  existence. 

223.  5137.  Power    to    hold    real    prop- 

erty. 

224.  51.38.  Requisite  amount  of  capital. 

225.  5139.  Shares  of  stock  and  trans- 

fers. 

226.  5140.  How    payment     of    capital 

stock  must  be  made  and 
certified. 

227.  5141.  Proceedings   if   shareholder 

fails  to  pay  installments. 

228.  5142.  National     banks     may     in- 

crease capital  stock. 

229.  Act    May    1,    1886.     Increase    of 

capital  stock. 

230.  5143.  Reduction  of  capital  stock. 

231.  5144.  Right    of    shareholders    to 

vote.  Proxies  author- 
ized. 

232.  5145.  Election  of  directors. 

233.  5146.  Requisite     qualification     of 

directors. 

234.  Acts  of  October  15,  1914,  and  May 

15,_  1916.  Interlocking  di- 
rectorates—when forbid- 
den. 

235.  Act    October   15,    1914.     Enforce- 

ment of  act  in  reference 
to  interlocking  director- 
ates. 

236.  5147.  Oath    required   from    direc- 

tors. 

237.  5148.  Filling  vacancies. 

238.  5149.  Proceedings  where  no  elec- 

tion is  held  on  the  proper 
day. 

239.  5150.  Election  of  president  of  the 

board. 

240.  5151.  Individual  liability  of  share- 

holders. 

241.  Act     December    23,    1913.     Indi- 

vidual liability  of  share- 
holders. Liability  of 
shareholders  who  have 
transferred    their    shares. 

242.  5152.  Executors,      trustees,      etc., 

not  personally  liable. 

243.  5153.  National    banking    associa- 

tions to  be  depositaries 
of  public  moneys. 

244.  Act  December  23,  1913.     Govern- 

ment deposits  in  Federal 
reserve   banks. 

245.  5154.  Conversion   of   State   banks 

into  national  baiiking  as- 
sociations. 

246.  5155.  State    banks    having 

branches. 

247.  5156.  Reservation     of     rights    of 

assix-iations         organized 
under  act  of  1863. 
19 


20  OEGAXIZATION   AND  PO^'ERS. 

THE  NATIONAL  BANK  ACT.     ACT  JUNE  20,  1874. 

Act  June  20,  200.  Sec.  1. — An  act  entitled  "An  act  to  provide  a  na- 
sec  1" ;  18  Stat!  tional  cuiTencv  secured  by  a  pledge  of  United  States 
L.,  123.  bonds,  and  to  provide  for  the  circulation  and  redemption 

thereof,"  approved  June  3,  1864,  shall  hereafter  be  known 

as  "  the  national-bank  act." 

FORMATION  OF  NATIONAL  BANKING  ASSOCIATIONS. 

Act  Jnne  3,  201.  Scc.  5133. — Associatious  for  carrying  on  the  busi- 
sfc^^s :  13  Stat;  ness  of  banking  under  this  Title  may  be  formed  by  any 
L.,  100.  number  of  natural  persons,  not  less  in  any  case  than  five. 

They  shall  enter  into  articles  of  association,  vrhich  shall 
specify  in  general  terms  the  object  for  which  the  associa- 
tion is  formed,  and  may  contain  any  other  provisions, 
not  inconsistent  with  law.  which  the  association  may  see 
fit  to  adopt  for  the  regulation  of  its  business  and  the  con- 
duct of  its  affairs.  These  articles  shall  be  signed  by  the 
persons  uniting  to  form  the  association,  and  a  copy  of 
them  shall  be  forwarded  to  the  Comptroller  of  the  Cur- 
rency, to  be  filed  and  preserved  in  his  office. 

KEQUISITES  OF  OEGANIZATION  CERTIFICATE. 

1864*  c"°^i06'  ^^^'  ^®^-  ^^^^- — '^^^  persons  uniting  to  form  such  an 
sec.  6 ;  13  Stat!  association  shall,  under  their  hands,  make  an  organiza- 
^'  ^^^'  tion  certificate,  which  shall  specifically  state : 

First.  The  name  assumed  bv  such  association:  which 
name  shall  be  subject  to  the  approval  of  the  Comptroller 
of  the  Currencv. 

Second.  The  place  where  its  operations  of  discount  and 
deposit  are  to  be  carried  on.  designating  the  State,  Terri- 
tory, or  district,  and  the  particular  county  and  city,  town, 
or  village. 

Third.  The  amount  of  capital  stock  and  the  number  of 
shares  into  which  the  same  is  to  be  divided. 

Fourth.  The  names  and  places  of  residence  of  the 
shareholders  and  the  number  of  shares  held  by  each  of 
them. 

Fifth.  The  fact  that  the  certificate  is  made  to  enable 
such  persons  to  avail  themselves  of  the  advantages  of 
this  Title. 

Note. — For  authority  to  change  names  or  locations  see  act  May 
1,  18S6,  post,  paragraph  211. 

HOW   CERTIFICATES    SHALL   BE    ACKNOWLEDGED   AND 
FILED. 

1864*  c°°%6'  ^^^'  ^^^'  ^^^^- — "^h®  organization  certificate  shall  be 
Bee.  6 ;  13  Stat!  acknowledged  before  a  judge  of  some  court  of  record,  or 
L.,  101.  notary  public;  and  shall  be,  together  with  the  acknowl- 

edgment thereof,  authenticated  by  the  seal  of  «uch  court, 
or  notary,  transmitted  to  the  Comptroller  of  the  Cur- 
rency, who  shall  record  and  carefully  preserve  the  same 
in  his  office. 


ORGANIZATION   AND  POWERS.  21 

CORPORATE  POWERS  OF  ASSOCIATION. 

204.  Sec.  5136. — Upon  duly  making  and  filing  articfes  Act  June  s. 
of  association  and  an  organization  certificate,  the  asso- sec^^s :  is  stat! 
elation  shall  become,  as  from  the  date  of  the  execution'"-'  ^^i- 

of  its  organization  certificate,  a  body  corporate,  and  as 
such,  and  in  the  name  designated  in  the  organization 
certificate,  it  shall  have  power — 

First.  To  adoj)t  and  use  a  corporate  seal. 

Second.  To  have  succession  for  the  period  of  twenty 
years  from  its  organization,  unless  it  is  sooner  dissolved 
according  to  the  provisions  of  its  articles  or  association, 
or  by  the  act  of  its  shareholders  owning  two-thirds  of  its 
stock,  or  unless  its  franchise  becomes  forfeited  by  some 
violation  of  law. 

Third.  To  make  contracts. 

Fourth.  To  sue  and  be  sued,  complain  and  defend,  in 
any  court  of  law  and  equity, -as  fully  as  natural  persons. 

Fifth.  To  elect  or  appoint  directors,  and  by  its  board 
of  directors  to  appoint  a  president,  vice  president,  cashier, 
and  other  officers,  define  their  duties,  require  bonds  of 
them  and  fix  the  penalty  thereof,  dismiss  such  officers  or 
any  of  them  at  pleasure,  and  appoint  others  to  fill  their 
places. 

Sixth.  To  prescribe,  by  its  board  of  directors,  by-laws 
not  inconsistent  with  law,  regulating  the  manner  in 
which  its  stock  shall  be  transferred,  its  directors  elected 
or  appointed,  its  officers  appointed,  its  property  trans- 
ferred, its  general  business  conducted,  and  the  privileges 
granted  to  it  by  law  exercised  and  enjoyed. 

Seventh.  To  exercise  by  its  board  of  directors,  or  duly 
authorized  officers  or  agents,  subject  to  law,  all  such  inci- 
dental powers  as  shall  be  necessary  to  carry  on  the  busi- 
ness of  banking;  by  discounting  and  negotiating  promis- 
sory notes,  drafts,  bills  of  exchange,  and  other  evidences 
of  debt;  by  receiving  deposits;  by  buying  and  selling 
exchange,  coin,  and  bullion;  by  loaning  money  on  per- 
sonal security ;  and  by  obtaining,  issuing,  and  circulating 
notes  according  to  the  provisions  of  this  Title. 

But  no  association  shall  transact  any  business  except 
such  as  is  incidental  and  necessarily  preliminary  to  its 
organization,  until  it  has  been  authorized  by  the  Comp- 
troller of  the  Currency  to  commence  the  business  of 
banking. 

Note. — See  sections  5169  and  5170,  paragraphs  320  and  321,  post, 
relating  to  issuing  and  publishing  of  certificate  authorizing  asso- 
ciation to  begin  Ijusiness. 

LOANS  ON  IMPROVED  REAL  ESTATE. 

205.  Sec.  24. — Any  national  banking  association  not  jj^^g^*  ^^<=-  ^f'. 
situated  in  a  central  reserve  city  may  make  loans  secured  3S  'stat.'  "l.'. 
by  improved  and  unencumbered  farm  land  situated  "'Act.  Sept.  7, 
within  its  Federal  reserve  district  or  within  a  radius  of  J^*'!:^^'^^  ^*^'- 


22  ORGANIZATION   AND   POWERS. 

one  hundred  miles  of  the  place  in  which  such  bank  is 
located,  irrespective  of  district  lines,  and  may  also  make 
loans  secured  by  improved  and  unencumbered  real 
estate  located  within  one  hundred  miles  of  the  place  in 
which  such  bank  is  located,  irrespective  of  district  lines ; 
but  no  loan  made  upon  the  security  of  such  farm  land 
shall  be  made  for  a  longer  time  than  five  years,  and  no 
loan  made  upon  the  security  of  such  real  estate  as  dis- 
tinguished from  farm  land  shall  be  made  for  a  longer 
time  than  one  year  nor  shall  the  amount  of  any  such  loan, 
whether  upon  such  farm  land  or  upon  such  real  estate, 
exceed  fifty  per  centum  of  the  actual  value  of  the  prop- 
erty offered  as  security.  Any  such  bank  may  make 
such  loans,  whether  secured  bj"  such  farm  land  or  such 
real  estate,  in  an  aggi'egate  sum  equal  to  twenty-five 
per  centum  of  its  capital  and  surplus  or  to  one-third  of 
its  time  deposits  and  such  banks  may  continue  hereafter 
as  heretofore  to  receive  time  deposits  and  to  pay  interest 
on  the  same. 

The  Federal  Reserve  Board  shall  have  power  from  time 
to  time  to  add  to  the  list  of  cities  in  which  national  banks 
shall  not  be  permitted  to  make  loans  secured  upon  real 
estate  in  the  manner  described  in  this  section. 

WHEN  NATIONAL  BANK  AS  A  MEMBER  BANK  OF  FED- 
ERAL RESERVE  SYSTEM  MAY  ACCEPT  DRAFTS  OR 
BILLS  OF  EXCHANGE. 

Act  Dec.  23,     206.  Any  member  bank  may  accept  drafts  or  bills  of 
38  "'stir    L.,'  exchange    drawn    upon   it   having   not   more   than    six 
^^i'et  Mar    3  months'  sight  to  run,  exclusive  of  days  of  grace,  which 
1915 ;  38  Stat!  grow  out  of  transactions  involving  the  importation  or 
Act  Sept.  7,  exportation  of  goods ;  or  which  grow  out  of  transactions 
1^^762^^  ^*^*"  involving  the  domestic  shipment  of  goods,  provided  ship- 
Act  June  21,  ping  documents  conveying  or  securing  title  are  attached 
'  ^^^*   *      at  tlie  time  of  acceptance ;  or  which  are  secured  at  the 
time  of  acceptance  by  a  warehouse  receipt  or  other  such 
document  conveying  or  securing  title  covering  readily 
marketable    staples.     No    member    bank    shall    accept, 
whether  in  a  foreign  or  domestic  transaction,  for  any 
one  person,  company,  firm,  or  corporation  to  an  amount 
equal  at  any  time  in  the  aggregate  to  more  than  ten  per 
centum  of  its  paid-up  and  unimpaired  capital  stock  and 
surplus,  unless  the  bank  is  secured  either  by  attached 
documents  or  by  some  other  actual  security  growing  out 
of  the  same  transaction  as  the  acceptance;  and  no  Ijank 
shall  accept  such  bills  to  an  amount  equal  at  any  time  in 
the  aggregate  to  more  than  one-half  of  its  paid-up  and 
unimpaired  capital  stock  and  surplus:  Provided^  how- 
ever^ That  the  Federal  Reserve  Board,  under  such  gen- 
eral regulations  as  it  may  prescribe,  which  shall  apply 
to  all  banks  alike  regardless  of  the  amount  of  capital 
stock  and  surplus,  may  authorize  any  member  bank  to 
accept  such  bills  to  an  amount  not  exceeding  at  any  time 


ORGANIZATION  AND  POWERS.  23 

ill  the  aggregate  one  hundred  per  centum  of  its  paid-up 
and  unimpaired  capital  stock  and  surplus:  Provided^  fur- 
thei\  That  the  aggregate  of  acceptances  growing  out  of 
domestic  transactions  shall  in  no  event  exceed  fifty  per 
centum  of  such  capital  stock  and  surplus. 

207.  Acceptance  of  drafts  or  bills  of  exchange  drawn  upon  ^^Act  s^ept  j, 
national  banks  by  banks  or  bankers  in  foreign  countries  or  l.,  'amending 
dependencies  of  the  United  States.  I^e'a.  \lL  ^^• 

Any  member  bank  may  accept  drafts  or  bills  of  ex- 
change drawn  upon  it  having  not  more  than  three  months' 
sight  to  run,  exclusive  of  days  of  grace,  drawn  under 
regulations  to  be  prescribed  by  the  Federal  Reserve 
Board  by  banks  or  bankers  in  foreign  countries  or  de- 
pendencies or  insular  possessions  of  the  United  States  for 
the  purpose  of  furnishing  dollar  exchange  as  required  by 
the  usages  of  trade  in  the  respective  countries,  dependen- 
cies, or  insular  possessions.  Such  drafts  or  bills  may  be 
acquired  by  Federal  reserve  banks  in  such  amounts  and 
subject  to  such  regulations,  restrictions,  and  limitations 
as  may  be  prescribed  by  the  Federal  Reserve  Board: 
Provided,  however,  That  no  member  bank  shall  accept 
such  drafts  or  bills  of  exchange  referred  to  in  this  para- 
graph for  any  one  bank  to  an  amount  exceeding  in  the 
aggregate  ten  per  centum  of  the  paid-up  and  unimpaired 
capital  and  surplus  of  the  accepting  bank  unless  the  draft 
or  bill  of  exchange  is  accompanied  by  documents  convey- 
ing or  securing  title  or  by  some  other  adequate  security : 
Provided  further,  That  no  member  bank  shall  accept  such 
drafts  or  bills  in  an  amount  exceeding  at  any  time  the 
aggregate  of  one-half  of  its  paid-up  and  unimpaired 
capital  and  surplus. 

TRUST  COMPANY  POWERS  OF  NATIONAL  BANKS. 

208.  The  Federal  Reserve  Board  is  authorized  by  sec-  ■^^^l^c':\iX\ 
tion  11, paragraph  k,of  the  Federal  reserve  act  "to  grant  38St'at.L.,28i: 
by  special  permit  to  national  banks  applying  therefor, 

•when  not  in  contravention  of  State  or  local  law,  the  right 
to  act  as  trustee,  executor,  administrator,  registrar  of 
stocks  and  bonds,  guardian  of  estates,  assignee,  receiver, 
committee  of  estates  of  lunatics,  or  in  any  other  fiduciary 
capacity  in  which  State  banks,  trust  companies,  or  other 
corporations  which  come  into  competition  with  national 
banks  are  permitted  to  act  under  the  laws  of  the  State 
in  which  the  national  bank  is  located. 

"  Whenever  the  laws  of  such  State  authorize  or  permit 
the  exercise  of  any  or  all  of  the  foregoing  powers  by 
State  banks,  trust  companies,  or  other  corporations  which 
compete  with  national  banks,  the  granting  to  and  the 
exercise  of  such  powers  by  national  banks  shall  not  be 
deemed  to  be  in  contravention  of  State  or  local  law 
within  the  meaning  of  this  act. 

"  National  banks  exercising  anj'  or  all  of  the  powers 
enumerated  in  this  subsection  shall  segregate  all  assets 
held  in  any  fiduciary  capacity  from  the  general  assets  of 


24  ORGANIZATION   AND  POWERS. 

the  bank  and  shall  keep  a  separate  set  of  books  and 
records  showing  in  proper  detail  all  transactions  en- 
gaged in  under  authority  of  this  subsection.  Such  books 
and  records  shall  be  open  to  inspection  by  the  State 
authorities  to  the  same  extent  as  the  books  and  records 
of  corporations  organized  under  State  law  which  exer- 
cise fiduciary  powers,  but  nothing  in  this  act  shall  be 
construed  as  authorizing  the  State  authorities  to  ex- 
amine the  books,  records,  and  assets  of  the  national  bank 
which  are  not  held  in  trust  under  authority  of  this  sub- 
section. 
1918*  ^^^**  ^^'  "  ^°  national  bank  shall  receive  in  its  trust  depart- 
ment deposits  of  current  funds  subject  to  check  or  the 
deposit  of  checks,  drafts,  bills  of  exchange,  or  other  items 
for  collection  or  exchange  purposes.  Funds  deposited  or 
held  in  trust  by  the  bank  awaiting  investment  shall  be 
carried  in  a  separate  account  and  shall  not  be  used  by  the 
bank  in  the  conduct  of  its  business  unless  it  shall  first 
set  aside  in  the  trust  department  United  States  bonds  or 
other  securities  approved  by  the  Federal  Reserve  Board. 

"  In  the  event  of  the  failure  of  such  bank  the  owners 
of  the  funds  held  in  trust  for  investment  sliall  have  a 
lien  on  the  bonds  or  other  securities  so  set  apart  in  addi- 
tion to  their  claim  against  the  estate  of  the  bank. 

"Whenever  the  laws  of  a  State  require  corporations 
acting  in  a  fiduciary  capacity  to  deposit  securities  with 
the  State  authorities  for  the  protection  of  private  or 
court  trusts,  national  banks  so  acting  shall  be  required 
to  make  similar  deposits  and  securities  so  deposited  shall 
be  held  for  the  protection  of  private  or  court  trusts,  as 
provided  by  the  State  law. 

"  National  banks  in  such  cases  shall  not  be  required  to 
execute  the  bond  usually  required  of  individuals  if  State 
corporations  under  similar  circumstances  are  exempt 
from  this  requirement. 

"National  banks  shall  have  power  to  execute  such 
bond  when  so  required  by  the  laws  of  the  State. 

"In  any  case  in  which  the  laws  of  a  State  require  that 
a  corporation  acting  as  trustee,  executor,  administrator, 
or  in  any  capacity  sjDecified  in  this  section,  shall  take  an 
oath  or  make  an  affidavit,  the  president,  vice  president, 
cashier,  or  trust  officer  of  such  national  bank  may  take 
the  necessary  oath  or  execute  the  necessary  affidavit. 

_  "  It  shall  be  unlawful  for  any  nationaf  banking  asso- 
ciation to  lend  any  officer,  director,  or  employee  any 
funds  held  in  trust  under  the  powers  conferred  by  this 
section.  Any  officer,  director,  or  employee  making  such 
loan,  or  to  whom  such  loan  is  made,  may  be  finec\  not 
more  than  $5,000,  or  imprisoned  not  more  than  five 
years,  or  may  be  both  fined  and  imprisoned,  in  the  dis- 
cretion of  the  court. 

_  "  In  passing  upon  applications  for  permission  to  exer- 
cise the  powers  enumerated  in  this  subsection,  the  Fed- 
eral  Reserve   Board   may   take  into  consideration   the 


ORGANIZATION   AND  POWERS.  25 

amount  of  capital  and  surplus  of  the  applyino;  bank, 
•whether  or  not  such  capital  and  surplus  is  sufficient  under 
the  circumstances  of  tlie  case,  the  needs  of  the  community 
to  be  served,  and  any  other  facts  and  circumstances  that 
seem  to  it  proper,  and  may  grant  or  refuse  the  applica- 
tion accordingly:  Provided^  That  no  permit  shall  be 
issued  to  any  national  banking  association  having  a  capi- 
tal and  surplus  less  than  the  capital  and  surplus  required 
by  State  law  of  State  banks,  trust  companies,  and  cor- 
porations exercising  such  powers." 

209.  Power  of  national  tank  to  act  as  insurance  agent  or  ^^^  g^pt  7 
as  broker  or  agent  in  making  or  procuring  loans  on  real  i^i^   39  stat.' 

°  o  X-  o  L    (o2,  amend- 

estate.  ing  sec.    13   of 

That  in  addition  to  the  powers  now  vested  by  law  in  ^^^-  ^^^-  '*^^*- 
national  banking  associations  organized  under  the  laws 
of  the  United  States  any  such  association  located  and 
doing  business  in  any  place  the  population  of  which  does 
not  exceed  five  thousand  inhabitants,  as  shown  by  the 
last  preceding  decennial  census,  may,  under  such  rules 
and  regulations  as  may  be  prescribed  by  the  Comptroller 
of  the  Currency,  act  as  the  agent  for  any  fire,  life,  or 
other  insurance  company  authorized  by  the  authorities 
of  the  State  in  which  said  bank  is  located  to  do  business 
in  said  State,  by  soliciting  and  selling  insurance  and  col- 
lecting premiums  on  policies  issued  by  such  company; 
and  may  receive  for  services  so  rendered  such  fees  or 
commissions  as  may  be  agreed  upon  between  the  said 
association  and  the  insurance  company  for  which  it  may 
act  as  agent;  and  may  also  act  as  the  broker  or  agent 
for  others  in  making  or  procuring  loans  on  real  estate 
located  within  one  hundred  miles  of  the  place  in  which 
said  bank  may  be  located,  receiving  for  such  services  a 
reasonable  fee  or  commission:  Provided^  however^  That 
no  such  bank  shall  in  any  case  guarantee  either  the  prin- 
cipal or  interest  of  any  such  loans  or  assume  or  guarantee 
the  payment  of  any  premium  on  insurance  policies  issued 
through  its  agency  by  its  principal:  And  frovided 
further,  That  the  bank  shall  not  guarantee  the  truth  of 
any  statement  made  by  au  assured  in  filing  his  applica- 
tion for  insurance. 

FOREIGN  BRANCHES  [as  amended  1919]. 

210.  Sec.  25. — Any  national  banking  association  pos-  ^^t  Dec.  ^23, 
sessing  a  capital  and  surplus  of  $1,000,000  or  more  may  38  'sfat  "l.| 
file  application  with  the  Federal  Reserve  Board  for  per^  '"^xct  Sept.  7, 
mission  to  exercise,  upon  such  conditions  and  under  such  Jf^^U*^  ^^^• 
regulations  as  may  be  prescribed  by  the  said  board,  either  Act  Sept.  17, 
or  both  of  the  following  powers:  ^^'^- 

First.  To  establish  branches  in  foreign  countries  or 
dependencies  or  insular  possessions  of  the  United  States 
for  the  furtherance  of  the  foreign  commerce  of  the  United 
States,  and  to  act  if  required  to  do  so  as  fiscal  agents  of 
the  United  States. 


26  ORGANIZATION   AND  POWERS. 

Second.  To  invest  an  amount  not  exceeding  in  the 
aggregate  ten  per  centum  of  its  paid-in  capital  stock  and 
surplus  in  the  stock  of  one  or  more  banks  or  corporations 
chartered  or  incorporated  under  the  laws  of  the  United 
States  or  of  any  State  thereof,  and  principally  engaged 
in  international  or  foreign  banking,  or  banking  in  a  de- 
pendency or  insular  possession  of  the  United  States  either 
directly  or  through  the  agency,  ownership,  or  control  of 
local  institutions  in  foreign  countries,  or  in  such  depend- 
encies or  insular  possessions.  Until  January  1,  1921,  any 
national  banking  association,  without  regard  to  the 
amount  of  its  capital  and  surplus,  may  file  application 
with  the  Federal  Reserve  Board  for  permission,  upon 
such  conditions  and  under  such  regulations  as  may  be  pre- 
scribed by  said  board,  to  invest  an  amount  not  exceeding 
in  the  aggregate  5  per  centum  of  its  paid-in  capital  and  sur- 
plus in  the  stock  of  one  or  more  corporations  chartered  or 
incorporated  under  the  laws  of  the  United  States  or  of 
any  State  thereof  and,  regardless  of  its  location,  princi- 
pally engaged  in  such  phases  of  international  or  foreign 
financial  operations  as  may  be  necessary  to  facilitate  the 
export  of  goods,  wares,  or  merchandise  from  the  United 
States  or  any  of  its  dependencies  or  insular  possessions 
to  any  foreign  country:  Provided^  however^  That  in  no 
event  shall  the  total  investments  authorized  by  this  sec- 
tion by  any  one  national  bank  exceed  10  per  centum  of  its 
capital  and  surplus. 

Such  application  shall  specify  the  name  and  capital  of 
the  banking  association  filing  it,  the  powers  applied  for, 
and  the  place  or  places  where  the  banking  or  financial 
operations  proposed  are  to  be  carried  on.  The  Federal 
Reserve  Board  shall  have  power  to  approve  or  to  reject 
such  application  in  whole  or  in  part  if  for  any  reason  the 
granting  of  such  application  is  deemed  inexpedient,  and 
shall  also  have  power  from  time  to  time  to  increase  or 
decrease  the  number  of  places  where  such  banking  opera- 
tions may  be  carried  on. 

Every  national  banking  association  operating  foreign 
branches  shall  be  required  to  furnish  information  con- 
cerning the  condition  of  such  branches  to  the  Comptroller 
of  the  Currency  upon  demand,  and  every  member  bank 
investing  in  the  capital  stock  of  banks  Or  corporations 
described  above  shall  be  required  to  furnish  information 
concerning  the  condition  of  such  banks  or  corporations 
to  the  Federal  Reserve  Board  upon  demand,  and  the  Fed- 
eral Reserve  Board  may  order  special  examinations  of 
the  said  branches,  banks,  or  corporations  at  such  time  or 
times  as  it  may  deem  best. 

Before  any  national  bank  shall  be  permitted  to  pur- 
chase stock  in  any  such  corporation  the  said  corporation 
shall  enter  into  an  agreement  or  undertaking  with  the 
Federal  Reserve  Board  to  restrict  its  operations  or  con- 
duct its  business  in  such  manner  or  under  such  limita- 


ORGANIZATION   AND  POWERS.  27 

tions  and  restrictions  as  the  said  board  may  prescribe  for 
the  phico  or  places  Avherein  such  business  is  to  be  con- 
ducted. If  at  anj^  time  the  Federal  Reserve  Board  shall 
ascertain  that  the  regulations  prescribed  by  it  are  not 
being  complied  with,  said  board  is  hereby  authorized  and 
empowered  to  institute  an  investigation  of  the  matter  and 
to  send  for  persons  and  papers,  subpoena  witnesses,  and 
administer  oaths  in  order  to  satisfy  itself  as  to  the  actual 
nature  of  the  transactions  referred  to.  Should  such  in- 
vestigation result  in  establishing  the  failure  of  the  cor- 
poration in  question,  or  of  the  national  bank  or  banks 
which  may  be  stockholders  therein,  to  comply  with  the 
regulations  laid  down  by  the  said  Federal  Reserve  Board, 
such  national  banks  may  be  required  to  dispose  of  stock 
holdings  in  the  said  corporation  upon  reasonable  notice. 

Every  such  national  banking  association  shall  conduct 
the  accounts  of  each  foreign  branch  inde|3endently  of  the 
accounts  of  other  foreign  branches  established  by  it  and 
of  its  home  office,  and  shall  at  the  end  of  each  fiscal 
period  transfer  to  its  general  ledger  the  profit  or  loss 
accrued  at  each  branch  as  a  separate  item. 

Any  director  or  other  officer,  agent,  or  employee  of 
any  member  bank  may,  with  the  approval  of  the  Federal 
Reserve  Board,  be  a  director  or  other  officer,  agent,  or 
employee  of  any  such  bank  or  corporation  above  men- 
tioned in  the  capital  stock  of  which  such  member  bank 
shall  have  invested  as  hereinbefore  provided,  without 
being  subject  to  the  provisions  of  section  eight  of  the  Act 
approved  October  fifteenth,  nineteen  hundred  and  four- 
teen, entitled  "An  Act  to  supplement  existing  laws 
against  unlawful  restraints  and  monopolies,  and  for 
other  purposes." 

CHANGE  OF  NAME  AND  LOCATION  OF  BANK.     ACT  MAT 

1,  1886. 

211.  Sec.  2. — That  any  national  banking  association  may    ^ct  May^  i, 
change  its  name  or  the  place  where  its  operations  of  dis-  sec.  2 ;  24  stat! 
count  and  deposit  are  to  be  carried  on,  to  any  other  place  ^'  ^^' 
within  the  same  State,  not  more  than  thirty  miles  dis- 
tant, with  the  approval  of  the  Comptroller  of  the  Cur- 
rency, by  the  vote  of  shareholders  owning  two-thirds  of 

the  stock  of  such  association.  A  duly  authenticated 
notice  of  the  vote  and  of  the  new  name  or  location  se- 
lected shall  be  sent  to  the  office  of  the  Comptroller  of  the 
Currency;  but  no  change  of  name  or  location  shall  be 
valid  until  the  Comptroller  shall  have  issued  his  certifi- 
cate of  approval  of  the  same. 

DEBTS  NOT  AFFECTED  BY  CHANGE.     ACT  MAY  1,  1886. 

212.  Sec.  3.— That  all  debts,  liabilities,  rights,  provi-    Act   May   1. 

T  ~    ,1  '.     .  .  1         -V        1  1  1880,  c.  (3,  sec. 

sions,  and  powers  of  the  association  under  its  old  name  .-^ ;  24  stat.  l., 
shall  devolve  upon  and  inure  to  the  association  under  ^^' 
its  new  name. 


28  ORGAXIZATION   AND  POWERS. 

NO  RELEASE  FROM  LIABILITIES.     ACT  MAT  ],  1886. 

Act  May  1,  213.  Sec.  4. — That  nothing  in  this  act  contained  shall  be 
41^24 *^stat  ^if'  ^^  construed  as  in  any  manner  to  release  any  national 
19.  '  banking  association  under  its  old  name  or  at  its  old  loca- 

tion from  any  liability,  or  afiect  any  action  or  proceeding 
in  law  in  which  said  association  may  be  or  become  a 
part}^  or  interested. 

XoTE.- — Section  1  of  this  act  relates  to  increase  of  capital  stock 
and  is  inserted  after  Section  5142,  United  States  Revised  Statutes. 

NATIONAL    BANKS    DEEMED    CITIZENS    OF    STATES    IN 
WHICH  LOCATED.    ACT  AUGUST  13,  1888. 

188-*'  ^^'Y'-  'M      ^^^"  ^^^'  ^" — That  all  national  banking  associations  es- 
stat.'  L.,  554."   tablislicd  under  the  laws  of  the  United  States  shall,  for 
1888*  *c"°'866;  the  purposes  of  all  actions  by  or  against  them,  real,  per- 
^^'c.  4 :  25  Stat,  sonal,  or  mixed,  and  all  suits  in  equity,  be  deemed  citizens 
of  the  States  in  which  they  are  respectively  located;  and 
in  such  cases  the  circuit  and  district  courts  shall  not  have 
jurisdiction  other  than  such  as  they  would  have  in  cases 
between  individual  citizens  of  the  same  State.    The  pro- 
visions of  this  section  shall  not  be  held  to   affect  the 
jurisdiction  of  the  courts  of  the  United  States  in  cases 
commenced  by  the  United  States  or  by  direction  of  any 
officer  thereof,  or  cases  for  winding  up  the  affairs  of  any 
such  bank. 

Note.— See  act  March  3,  1911,  section  24,  36  Stat.  L.,  1092,  para- 
graph 701,  post,  as  to  jurisdiction  of  United  States  courts  in 
national  banking  cases. 

EXTENSION  OF  CORPORATE  EXISTENCE.     ACT  JULY  12, 

1882. 

Act  July  12.  215.  Sec.  1. — That  any  national  banldng  association 
Bec."i ;  22  s"tat!  Organized  under  the  acts  of  February  twenty-fifth,  eight- 
L.,  162.  ggj-^  liundred  and  sixty-three,  June  third,  eighteen  hun- 

dred and  sixty-four,  and  February  fourteenth,  eighteen 
hundred  and  eighty,  or  under  sections  fifty-one  hundred 
and  thirty-three,  fifty-one  hundred  and  thirty-four,  fifty- 
one  hundred  and  thirty-five,  fifty-one  hundred  and 
thirty-six,  and  fift^'-one  hundred  and  fifty-four  of  the 
Revised  Statutes  of  the  United  States,  may,  at  any  time 
within  the  two  years  next  previous  to  the  date  of  the  ex- 
piration of  its  corporate  existence  under  present  law.  and 
with  the  approval  of  the  Comptroller  of  the  Currency,  to 
be  granted,  as  hereinafter  provided,  extend  its  period  of 
succession  by  amending  its  articles  of  association  for  a 
term  of  not  more  than  twenty  years  from  the  expiration 
of  the  period  of  succession  named  in  said  articles  of  asso- 
ciation, and  shall  have  succession  for  such  extended 
period,  unless  sooner  dissolved  by  the  act  of  shareholders 
owning  two-thirds  of  its  stock,  or  unless  its  franchise 
becomes  forfeited  by  some  violation  of  law,  or  unless 
hereafter  modified  or  repealed. 

Note. — Act  of  February  14.  1880,  relates  to  the  conversion  of 
gold  banlcs  into  currency  banks,  and  is  inserted  after  Revised 
Statutes  5186. 


ORGAXIZATION   AND   PO^VERS.  29 

CONSENT   OF  TWO-THIRDS  NECESSARY.     ACT   JULY   12, 

1882. 

216.  Sec.  2. — That  such  amendment  of  said  articles  of  jg^^^^  ''c"'^  i-io' 
association  shall  be  authorized  by  the  consent  in  writing  sec.  2 ;  22  s'lat! 

T       1  fl2 

of  shareholders  owning  not  less  than  two-thirds  of  the  " 
capital  stock  of  the  association;  and  the  board  of  direc- 
tors shall  cause  such  consent  to  be  certified  under  the  seal 
of  the  association,  by  its  president  or  cashier,  to  the 
Comptroller  of  the  Currency,  accompanied  by  an  appli- 
cation made  by  the  president  or  cashier  for  the  approval 
of  the  amended  articles  of  association  hj  the  Comp- 
troller; and  such  amended  articles  of  association  shall 
not  be  valid  until  the  Comptroller  shall  give  to  such  asso- 
ciation a  certificate  under  his  hand  and  seal  that  the 
association  has  complied  with  all  the  provisions  required 
to  be  complied  witli,  and  is  authorized  to  have  succession 
for  the  extended  period  named  in  the  amended  articles  of 
association. 

SPECIAL  EXAMINATION  OF  BANK  AND  ISSUE  OF  CER- 
TIFICATE OF  APPROVAL  BY  COMPTROLLER.  ACT 
JULY  12,  1882. 

217.  Sec.  3. — That  upon  the  receipt  of. the  application ^^^ct  J^i^iy.,i2, 
and  certificate  of  the  association  provided  for  in  the  pre-  sec.~;;;  22  s'tat.' 
ceding  section,  the  Comptroller  of  the  Currency  shall  ^■'  ^^^• 
cause  a  special  examination  to  be  made,  at  the  expense  of 

the  association,  to  determine  its  condition;  and  if  after 
such  examination  or  otherwise  it  appears  to  him  that 
said  association  is  in  a  satisfactory  condition,  he  shall 
grant  his  certificate  of  approval  provided  for  in  the  pre- 
ceding section,  or  if  it  appears  that  the  condition  of  said 
association  is  not  satisfactory,  he  shall  withhold  such 
certificate  of  ajDproval. 

STATUS  NOT  CHANGED  BY  EXTENSION.  JURISDICTION 
OF  SUITS  BY  OR  AGAINST  NATIONAL  BANKS.  ACT 
JULY  12,  1882. 

218.  Sec.   4. — That   any   association   so   extending  the  ^^^.f  'c^'^soo' 
pei'iod  of  its  succession  shall  continue  to  enjoy  all  thesec.  4 :  22  stat! 
rights  and  privileges  and  immunities  granted  and  shall    "    ^  " 
continue  to  be  subject  to  all  the  duties,  liabilities,  and  re- 
strictions imposed  by  the  Revised  Statutes  of  the  United 

States  and  other  acts  having  reference  to  national  bank- 
ing associations,  and  it  shall  continue  to  be  in  all  respects 
the  identical  association  it  was  before  the  extension  of  its 
period  of  succession :  Provided,  however^  That  the  juris- 
diction for  suits  hereafter  brought  by  or  against  any  as- 
sociation established  under  any  law  providing  for  na- 
tional banking  associations,  except  suits  between  them 
and  the  United  States,  or  its  officers  and  agents,  shall  be 
the  same  as,  and  not  other  than,  the  jurisdiction  for  suits 
by  or  against  banks  not  organized  under  any  law  of  the 
United  States  which  do  or  might  do  banking  business 
where  such  national  banking  associations  may  be  doing 
business  when  such  suits  may  be  begun:  And  all   laws 


30  OKGANIZATION   AND  POWERS. 

and  parts  of  laws  of  the  United  States  inconsistent  with 
this  proviso  be,  and  the  same  are  hereby,  repealed. 

Note. — See  also  act  of  August  13,  1888,  relating  to  citizenship  of 
national  banks  and  jurisdiction  of  the  circuit  and  district  courts, 
paragraph  214,  ante,  and  act  of  Mar.  3,  1911,  sec.  24,  36  Stat.  L., 
1092,  paragraph  701,  post,  as  to  jurisdiction  of  United  States 
courts  In  national  banking  cases. 

DISSENTING     SHAREHOLDERS     MAY     WITHDRAW.      ACT 
JULY  12,  1882. 

188^*  'l"^'^29o'  ^^^'  ^^^'  ^" — That  when  any  national  banking  associa- 
Bec."5 ;  22  Stat!  tion  has  amended  its  articles  of  association  as  provided 
L.,  163.  jjj  ^j^jg  ^^^^  j^j-^^  ^YiQ  Comptroller  has  granted  his  certificate 

of  approval,  any  shareholder  not  assenting  to  such 
amendment  may  give  notice  in  writing  to  the  directors, 
within  thirty  days  from  the  date  of  the  certificate  of  ap- 
proval, of  his  desire  to  withdraw  from  said  association, 
in  which  case  he  shall  be  entitled  to  receive  from  said 
banking  association  the  value  of  the  shares  so  held  by 
him,  to  be  ascertained  by  an  appraisal  made  by  a  com- 
mittee of  three  persons,  one  to  be  selected  by  such  share- 
holder, one  by  the  directors,  and  the  third  by  the  first 
two ;  and  in  case  the  value  so  fixed  shall  not  be  satisfac- 
tory to  any  such  shareholder,  he  may  appeal  to  the  Comp- 
troller of  the  Currency,  who  shall  cause  a  reappraisal 
to  be  made,  which  shall  be  final  and  binding;  and  if  said 
reappraisal  shall  exceed  the  value  fixed  by  said  commit- 
tee, the  bank  shall  pay  the  expenses  of  said  reappraisal, 
and  otherwise  the  appellant  shall  pay  said  expenses;  and 
the  value  so  ascertained  and  determined  shall  be  deemed 
to  be  a  debt  due,  and  be  forthwith  paid,  to  said  share- 
holder from  said  bank;  and  the  shares  so  surrendered 
and  appraised  shall,  after  due  notice,  be  sold  at  public 
sale,  withtin  thirty  days  after  the  final  appraisal  provided 
in  this  section  :  Provided,  That  in  the  organization  of  any 
banking  association  intended  to  replace  any  existing 
banking  association,  and  retaining  the  name  thereof,  the 
holders  of  stock  in  the  expiring  association  shall  be  enti- 
tled to  preference  in  the  allotment  of  the  shares  of  the 
new  association  in  proportion  to  the  number  of  shares 
held  by  them  respectively  in  the  expiring  association. 

REDEMPTION  OF  CIRCULATING}  NOTES  ISSUED  PRIOR  TO 
EXTENSION.    ACT  JULY  12,  1882. 

1882.*  'c"^^20o;      22^-  ^^^-  ^- — That  the  circulating  notes  of  any  associa- 
sec.  6^;  22  Stat!  tion  SO  extending  the  period  of  its  succession  which  shall 
"       *  have  been  issued  to  it  prior  to  such  extension  shall  be  re- 

deemed at  the  Treasur}^  of  the  United  States,  as  provided 
in  section  three  of  the  act  of  June  twentieth,  eighteen 
hundred  and  seventy-four,  entitled  "An  act  fixing  the 
amount  cf  United  States  notes,  providing  for  redistribu- 
tion of  national  bank  currency,  and  for  other  purposes," 
and  such  notes  when  redeemed  shall  be  forwarded  to  the 
Comptroller  of  the  Currency,  and  destroyed  as  now  pro- 
vided by  law;  and  at  the  end  of  three  years  from  the  date 


ORGANIZATION   AND  POWERS.  31 

of  the  extension  of  the  corporate  existence  of  each  bank 
the  association  so  extended  shall  deposit  lawful  money 
with  the  Treasurer  of  the  United  States  sufficient  to  re- 
deem the  remainder  of  the  circulation  which  was  out- 
standing at  the  date  of  its  extension,  as  provided  in 
sections  fifty-two  hundred  and  twenty-two,  fifty-two 
hundred  and  twenty-four,  and  fifty-two  hundred  and 
twenty-five' of  the  Revised  Statutes;  and  any  gain  that 
may  arise  from  the  failure  to  present  such  circulating 
notes  for  redemption  shall  inure  to  the  benefit  of  the 
United  States;  and  from  time  to  time,  as  such  notes  are 
redeemed  or  lawful  money  deposited  therefor  as  provided 
herein,  new  circulating  notes  shall  be  issued  as  provided 
by  this  act,  bearing  such  devices,  to  be  approved  by  the 
Secretary  of  the  Treasury,  as  shall  make  them  readily 
distinguishable  from  the  circulating  notes  heretofore 
issued:  Provided^  however^  That  each  banking  associa- 
tion which  shall  obtain  the  benefit  of  this  act  shall  reim- 
burse to  the  Treasury  the  cost  of  preparing  the  plate  or 
plates  for  such  new  circulating  notes  as  shall  be  issued 
to  it. 

Note. — For  act  of  June  20,  1874,  section  3,  mentioned  above, 
see  paragraph  414,  post.  The  destruction  of  bank  notes  by  burn- 
ing, as  provided  in  sections  5184,  5225,  Revised  Statutes,  is  super- 
seded by  act  of  June  23.  1874,  paragraph  340,  post,  which  requires 
bank  notes  to  be  macerated. 

DISSOLUTION  OF  BANKS  NOT  EXTENDING  PERIOD   Ob' 
SUCCESSION.    ACT  JULY  12,  1882. 

221,  Sec.  7. — That  national  banking  associations  whose    |^t  "^"'^290' 
corporate  existence  has  expired  or  shall  hereafter  expire  sec.~7 ;  22  statl 
and  which  do  not  avail  themselves  of  the  provisions  of  ^'  ^^** 
this  act,  shall  be  required  to  comply  with  the  provisions 
of  sections  fifty-two  hundred  and  twenty-one  and  fifty- 
two  hundred  and  twenty-two  of  the  Eevised  Statutes  in 
same  manner  as  if  the  shareholders  had   voted  to   go 
into  liquidation,  as  provided  in  section  fifty-two  hundred 
and  twenty  of  the  Kevised  Statutes;  and  the  provisions 
of  sections  fifty-two  hundred  and  twenty-four  and  fifty- 
two  hundred  and  twenty-five  of  the  Revised  Statutes 
shall  also  be  applicable  to  such  associations,  except  as 
modified  by  this  act;  and  the  franchise  of  such  associa- 
tions is  hereby  extended  for  the  sole  purpose  of  liquidat- 
ing their  affairs  until" such  affairs  are  finally  closed. 

Note.— other  sections  of  act  of  July  12,  1882. 

Sec.  8.  [Relates  to  bond  deposits  and  circulating  notes.]  Fol- 
lows Revised  Statutes,  section  5167. 

Sec.  9. — [Relates  to  withdrawal  of  circulating  notes.]  Follows 
Revised  Statutes,  section  5167. 

Sec.  10. — Repealed  sections  5171  and  5176,  Revised  Statutes, 
and  was  superseded  by  act  of  March  14,  1900.  (See  section  5171, 
Revised  Statutes.) 

Sec.  11. — Authorizes  the  exchange  of  three  per  cent  bonds  for 
outstanding  three  and  one-half  per  cent  bonds. 

Sec.  12. — Authorizes  the  issue  of  gold  certificates  upon  the  de- 
posit of  gold  coin.     Inserted  after  section  5207. 

Sec.  13. —  [Relates  to  false  certification  of  checks.]  Superseded 
by  act  of  Sept.  26,  1918. 


32  OEGANIZATION   AND  POW'ERS. 

REEXTENSION    OF     CORPORATE     EXISTENCE.     ACT    OP 
APRIL  12,  1902. 

19^2!'  "^^^^50^1;  ^^^-  Tliat  the  Comptroller  of  the  Currency  is  hereby 
32^"'stat.  L.',  authorized,  in  the  manner  provided  by,  and  under  the 
conditions  and  limitations  of,  the  act  of  July  12,  1882,  to 
extend  for  a  further  period  of  twenty  j-eare  the  charter 
of  any  national  banking  association  extended  under  said 
act  which  shall  desire  to  continue  its  existence  after  the 
expiration  of  its  charter. 

POWER  TO  HOLD  REAL  PROPERTY. 

Act  J"°e  ^,  223.  Sec.  5137. — A  national  banking  association  may 
sec.  '  28 ;  13  purchase,  hold,  and  convey  real  estate  for  the  following 
Stat.  L.,  107.    purposes,  and  for  no  others: 

First.  Such  as  shall  be  necessary  for  its  immediate  ac- 
commodation in  the  transaction  of  its  business. 

Second.  Such  as  shall  be  mortgaged  to  it  in  good  faith 
by  way  of  security  for  debts  previously  contracted. 

Third.  Such  as  shall  be  conveyed  to  it  in  satisfaction  of 
debts  previously  contracted  in  the  course  of  its  dealings. 

Fourth.  Such  as  it  shall  purchase  at  sales  under  judg- 
ments, decrees,  or  mortgages  held  by  the  association,  or 
shall  purchase  to  secure  debts  due  to  it. 

But  no  such  association  shall  hold  the  possession  of  any 
real  estate  under  mortgage,  or  the  title  and  possession  of 
any  real  estate  purchased  to  secure  any  debts  due  to  it, 
for  a  longer  period  than  five  years. 

Note. — For  power  to  loan  on  real  estate  see  paragraph  205, 
ante, 

REQUISITE  AMOUNT  OF  CAPITAL. 

1864*  c"°\o6'  2^^-  ^®°-  ^^^^  t^^  amended  1900] — No  association  shall 
sec.  7 ;  13  Stat!  be  organized  with  a  less  capital  than  one  hundred  thou- 
^"Act^  Mar.  14,  sand  dollars,  except  that  banks  with  a  capital  of  not  less 
1900.  c.  41.  seel  ^j^j^j^  flfj-y  thousaud  dollars  may,  with  the  approval  of  the 

10  ;        31        btat,  ''  p       T  rr\  1  •!•  1  1 

L.,  48.  Secretary  oi  the  1  reasury,  be  organized  m  any  place  the 

population  of  which  does  not  exceed  six  thousand  inhab- 
itants, and  except  that  banks  with  a  capital  of  not  less 
than  twenty-five  thousand  dollars  may,  with  the  sanction 
of  the  Secretary  of  the  Treasury,  be  organized  in  any 
place  the  population  of  which  does  not  exceed  three 
thousand  inhabitants.  Xo  association  shall  be  organized 
in  a  city  the  population  of  which  exceeds  fifty  thousand 
persons  with  a  capital  of  less  than  two  hundred  thousand 
dollars. 

SHARES  OF  STOCK  AND  TRANSFERS. 

1864,*  f""1o(;:      225.  Sec.  5139.— The  capital  stock  of  each  association 

si^"t'  L^'io-^^^  -hall  be  divided  into  shares  of  one  hundred  dollars  each, 

and  be  deemed  personal  property,  and  transferable  on  the 

books  of  the  association  in  such  manner  as  may  be  pre- 


ORGANIZATION   AND  POWERS.  33 

scribed  in  the  by-laws  or  articles  of  association.  Every 
person  becoming  a  shareholder  by  such  transfer  shall,  in 
proportion  to  his  shares,  succeed  to  all  rights  and  lia- 
bilities of  the  prior  holder  of  such  shares ;  and  no  change 
shall  be  made  in  the  articles  of  association  by  which  the 
rights,  remedies,  or  security  of  the  existing  creditors  of 
the  association  shall  be  impaired. 

Note. — See  also  section  23,  Federal  reserve  act,  following  sec- 
tion 5151,  United  States  Revised  Statutes. 

HOW  PAYMENT  OF  THE  CAPITAL  STOCK  MUST  BE  MADE 
AND  CERTIFIED. 

226.  Sec.  5140. — At  least  fifty  per  centum  of  the  capital  ^^Act  J"°e  3. 
stock  of  every  association  shall  be  paid  in  before  it  shall  sec.  '  i4;     i3 
be  authorized  to  commence  business ;  and  the  remainder  ^^^^-  ^'  ^^^• 
of  the  capital  stock  of  such  association  shall  be  paid  in 
installments  of  at  least  ten  per  centum  each,  on  the  whole 

amount  of  the  capital,  as  frequently  as  one  installment 
at  the  end  of  each  succeeding  month  from  the  time  it 
shall  be  authorized  by  the  Comptroller  of  the  Currency 
to  commence  business;  and  the  payment  of  each  install- 
ment shall  be  certified  to  the  Comptroller,  under  oath,  by 
the  president  or  cashier  of  the  association. 

PROCEEDINGS  IF  SHAREHOLDER  FAILS  TO  PAY  INSTALL- 
MENTS. 

227.  Sec.  5141. — Whenever  any  shareholder,  or  his  as-    Act  Jui^^  3. 
signee,  fails  to  pay  any  installment  on  the  stock  when  the  sec.  '  i5 ;     is 
same  is  required  by  the  preceding  section  to  be  paid,  the  ^*^^  ^-  ^^^' 
directors  of  such  association  may  sell  the  stock  of  such 
delinquent  shareholder  at  public  auction,  having  given 

three  weeks'  previous  notice  thereof  in  a  newspaper  pub- 
lished and  of  general  circulation  in  the  city  or  county 
where  the  association  is  located,  or  if  no  newspaper  is 
published  in  said  city  or  countj',  then  in  a  newspaper 
published  nearest  thereto,  to  any  person  who  will  paj'  the 
highest  price  therefor,  to  he  not  less  than  the  amount  then 
due  thereon,  with  the  expenses  of  advertisement  and  sale ; 
and  the  excess,  if  any,  shall  be  paid  to  the  delinquent 
shareholder.  If  no  bidder  can  be  found  who  will  pay  for 
such  stock  the  amount  due  thereon  to  the  association,  and 
the  cost  of  advertisement  and  sale,  the  amount  previously 
paid  shall  be  forfeited  to  the  association,  and  such  stock 
shall  be  sold  as  the  directors  ma}'  order,  within  six  months 
from  the  time  of  such  forfeiture,  and  if  not  sold  it  shall 
be  canceled  and  deducted  from  the  capital  stock  of  the 
association.  If  any  such  cancellation  and  reduction  shall 
reduce  the  capital  of  the  association  below  the  minimum 
of  capital  required  by  law,  the  capital  stock  shall,  within 
thirty  days  from  the  date  of  such  cancellation,  be  in- 
creased to  the  required  amount;  in  default  of  which  a 
receiver  may  be  appointed,  according  to  the  provisions 

164:512°— 20 3 


34  OEGANIZATIOIT   AND  POW'ERS. 

of  section  fifty-two  hundred  and  thirty-four,  to  close  up 
the  business  of  the  association. 

NATIONAL  BANKS  MAY  INCREASE  CAPITAL  STOCK. 

Act  June  3,  228.  Sec.  5142. — Any  association  formed  under  this  title 
fie<\^'  13;  ^  1^3  may,  by  its  articles  of  association,  provide  for  an  increase 
stilt.  L..  103.  Q^  -^g  capital  from  time  to  time,  as  may  be  deemed  expe- 
dient, subject  to  the  limitations  of  this  title.  But  the 
maximum  of  such  increase  to  be  provided  in  the  articles 
of  association  shall  be  determined  by  the  Comptroller  of 
the  Currency;  and  no  increase  of  capital  shall  be  valid 
until  the  whole  amount  of  such  increase  is  paid  in.  and 
notice  thereof  has  been  transmitted  to  the  Comptroller 
of  the  Currency,  and  his  certificate  obtained  specifying 
the  amount  of  such  increase  of  capital  stock,  with  his 
approval  thereof,  and  that  it  has  been  duly  paid  in  as 
part  of  the  capital  of  such  association. 

INCREASE  OF  CAPITAL  STOCK.     ACT  MAY  1,  1886. 

Act  May  1,  229.  Sec.  1. — That  anv  national  banking  association 
if  24%tat.T;  may,  with  the  approvalof  the  Comptroller  of  the  Cur- 
1®'  rency,  by  the  vote  of  shareholders  owning  two-thirds  of 

the  stock  of  such  association,  increase  its  capital  stock,  in 
accordance  with  existing  laws,  to  any  sum  approved  by 
the  said  Comptroller,  notwithstanding  the  limit  fixed  in 
its  original  articles  of  association  and  determined  by  said 
Comptroller ;  and  no  increase  of  the  capital  stock  of  any 
national  banking  association  either  within  or  beyond  the 
limit  fixed  in  its  original  articles  of  association  shall  be 
made  except  in  the  manner  herein  provided. 

Note. — For  other  sections  of  this  act  see  paragraphs  211,  212, 
and  213,  ante. 

REDUCTION  OF  CAPITAL  STOCK. 

Act  June  3,     230.  Scc.  5143. — Any  association  formed  under  this  title 
Bec^^'  13;  ^^1^3  may,  by  the  vote  of  shareholders  owning  two-thirds  of 
Stat.  L.,  103.    jts  capital  stock,  reduce  its  capital  to  any  sum  not  below 
the  amount  required  by  this  title  to  authorize  the  forma- 
tion of  associations;  but  no  such  reduction  shall  be  allow- 
able which  will  reduce  the  capital  of  the  association  below 
Act  Dec.  23,  the  amount  required  for  its  outstanding  circulation,  nor 
38^^  si&t'  ^l'  shall  any  reduction  be  made  until  the  amount  of  the  pro- 
274.       '      "  posed  reduction  has  been  reported  to  the  Comptroller  of 
the  Currency  and  such  reduction  has  been  approved  by 
the  said  Comptroller  of  the  Currency  and  by  the  Federal 
Reserve  Board,  or  by  the  organization  committee  pend- 
ing the  organization  of  the  Federal  Reserve  Board. 

EIGHT  OF  SHAREHOLDERS  TO  TOTE;  PROXIES  AUTHOR- 
IZED. 

Act  June  3,  231.  Sec.  5144. — ^In  all  elections  of  directors,  and  in 
sp^c^^'  11;  ^Tk  deciding  all  questions  at  meetings  of  shareholders,  each 
Stat.  L.,  102.    shareholder  shall  be  entitled  to  one  vote  on  each  share  of 


ORGANIZATION   AND  POWERS.  35 

stock  held  by  him.  Shareholders  may  vote  by  proxies 
duly  authorized  in  writing ;  but  no  officer,  clerk,  teller,  or 
bookkeeper  of  such  association  shall  act  as  proxy;  and 
no  shareholder  whose  liability  is  past  due  and  unpaid 
shall  be  allowed  to  vote. 

Note. — The  Circuit  Court  of  the  United  States,  in  United  States 
V.  Barry  (36  F.  R.,  246).  held  that  the  words  "liability  past  due 
and  unpaid  "  referred  only  to  unpaid  subscriptions  for  stock. 

ELECTION  OF  DIRECTORS. 

232.  Sec.  5145.— The  affairs  of  each  association  shall  be    Act  Juno  s, 
managed  by  not  less  than  five  directors,  who  shall  besecs.'9,*^io;  I'i 
elected  by  the  shareholders  at  a  meeting  to  be  held  at  any  ^*^**-  ^•'  ^^'^■ 
time  before  the  association  is  authorized  by  the  Comp- 
troller of  the  Currency  to  commence  the  business  of  bank- 
ing ;  and  afterward  at  meetings  to  be  held  on  such  day  in 
January  of  each   year  as   is   specified   therefor  in   the 

articles  of  association.  The  directors  shall  hold  office  for 
one  year,  and  until  their  successors  are  elected  and  have 
qualified. 

REQUISITE  QUALIFICATION   OF  DIRECTORS. 

233.  Sec.  5146  [amended  1905].— Every  director  must,,  ^ct  June  .3. 

J       •  u-  V,    1       J-  £  ■  1  -J.-  J!    j_i    '1864,     c.      lOG, 

during  his  whole  term  of  service,  be  a  citizen  or  the  sees,  o,  io:  i:{ 
United  States,  and  at  least  three-fourths  of  the  direc-  ^^Act^Feb.^iis. 
tors  must  have  resided  in  the  State,  Territory,  or  District  g^^^^^^t  ^^l*'' 
in  which  the  association  is  located  for  at  least  one  year  sis.  ' 
immediately  preceding  their  election  and  must  be  resi- 
dents therein  during  their  continuance  in  office.     Every 
director  must  own  in  his  own  right  at  least  ten  shares  of 
the  capital  stock  of  the  association  of  which  he  is  a  di- 
rector, unless  the  capital  of  the  bank  shall  not  exceed 
twenty-five  thousand  dollars,  in  which  case  he  must  own 
in  his  own  right  at  least  five  shares  of  such  capital  stock. 
Any  director  who  ceases  to  be  the  owner  of  the  required   ■ 
number  of  shares  of  the  stock,  or  who  becomes  in  any 
other  manner  disqualified,  shall  thereby  vacate  his  place. 

INTERLOCKING  DIRECTORATES— WHEN  FORBIDDEN. 

234.  Sec.  8. — That  from  and  after  two  years  from  the  ■^<'t  oct.  i5. 
date  of  the  approval  of  this  act  no  person  shall  at  the  st^a\^'L..' T^oii!^'' 
same  time  be  a  director  or  other  officer  or  employee  of 

more  than  one  bank,  banking  association,  or  trust  com- 
pany, organized  or  operating  under  the  laws  of  the  United 
States,  either  of  which  has  deposits,  capital,  surplus,  and 
undivided  profits  aggregating  more  tlian  $5,000,000;  and 
no  private  banker  or  person  who  is  a  director  in  any  bank 
or  trust  company,  organized  and  operating  under  the  laws 
of  a  State,  having  deposits,  capital,  surplus,  and  undi- 
vided profits  aggregating  more  than  $5,000,000.  shall  be 
eligible  to  be  a  director  in  any  bank  or  banking  associa- 


36  OKGANIZATION  AND  POWERS. 

tion  organized  or  operating  under  the  laws  of  the  United 
States.  The  eligibility  of  a  director,  officer,  or  employee 
under  the  foregoing  provisions  shall  be  determined  by 
the  average  amount  of  deposits,  capital,  surplus,  and  un- 
divided profits  as  shown  in  the  official  statements  of  such 
bank,  banking  association,  or  trust  company  filed  as  pro- 
vided by  law  during  the  fiscal  year  next  preceding  the 
date  set  for  the  annual  election  of  directors,  and  when  a 
director,  officer,  or  employee  has  been  elected  or  selected 
in  accordance  with  the  provisions  of  this  Act  it  shall  be 
lawful  for  him  to  continue  as  such  for  one  year  thereafter 
under  said  election  or  employment. 

No  bank,  banking  association,  or  trust  company,  or- 
ganized or  operating  under  the  laws  of  the  United  States, 
in  any  city  or  incorporated  town  or  village  of  more  than 
two  hundred  thousand  inhabitants,  as  shown  by  the  last 
preceding  decennial  census  of  the  United  States,  shall 
have  as  a  director  or  other  officer  or  employee  any  private 
banker  or  any  director  or  other  officer  or  employee  of 
any  other  bank,  banking  association,  or  trust  company 
located  in  the  same  place :  Provided^  That  nothing  in  this 
section  shall  apply  to  mutual  savings  banks  not  having  a 
capital  stock  represented  by  shares:  Provided  further^ 
That  a  director  or  other  officer  or  employee  of  such  bank, 
banking  association,  or  trust  company  may  be  a  director  or 
other  officer  or  employee  of  not  more  than  one  other  bank 
or  trust  company  organized  under  the  laws  of  the  United 
States  or  any  State  where  the  entire  capital  stock  of  one 
is  owned  by  stockholders  in  the  other:  And  'provided 
further^  That  nothing  contained  in  this  section  shall  forbid 
a  director  of  class  A  of  a  Federal  reserve  bank,  as  defined 
in  the  Federal  reserve  act,  from  being  an  officer  or 
director  or  both  an  officer  and  director  in  one  member 
15  b^^k*  ^^^  'provided  further^  That  nothing  in  this  act 
1916;  39^^stat!  shall  prohibit  any  officer,  director,  or  employee  of  any 
L.,  121.  member  bank  or  class  A  director  of  a  Federal  reserve 

bank,  who  shall  first  procure  the  consent  of  the  Federal 
Reserve  Board,  which  board  is  hereby  authorized,  at  its 
discretion,  to  grant,  withhold,  or  revoke  such  consent, 
from  being  an  officer,  director,  or  employee  of  not  more 
than  two  other  banks,  banking  associations,  or  trust 
companies,  whether  organized  under  the  laws  of  the 
United  States  or  any  State,  if  such  other  bank,  banking 
association,  or  trust  company  is  not  in  substantial  com- 
petition with  such  member  bank. 

The  consent  of  the  Federal  Reserve  Board  may  be 
procured  before  the  person  applying  therefor  has  been 
elected  as  a  class  A  director  of  a  Federal  reserve  bank  or 
as  a  director  of  any  member  bank. 

That  from  and  after  two  years  from  the  date  of  the 
approval  of  this  act  no  person  at  the  same  time  shall  be  a 
director  in  any  two  or  more  corporations,  any  one  of 
which  has  capital,  surplus,  and  undivided  profits  aggre- 


ORGANIZATION   AND  POWERS.  37 

gating  more  than  $1,000,000,  engaged  in  whole  or  in  part 
in  commerce,  other  than  banks,  banking  associations, 
trust  companies  and  common  carriers  subject  to  the 
act  to  regulate  commerce,  approved  February  fourth, 
eighteen  hundred  and  eighty-seven,  if  such  corporations 
are  or  shall  have  been  theretofore,  by  virtue  of  their 
business  and  location  of  operation,  competitors,  so  that 
the  elimination  of  competition  by  agreement  between 
them  would  constitute  a  violation  of  any  of  the  provisions 
of  any  of  the  antitrust  laws.  The  eligibility  of  a  director 
under  the  foregoing  provision  shall  be  determined  by  the 
aggregate  amount  of  the  capital,  surplus,  and  undivided 
profits,  exclusive  of  dividends  declared  but  not  paid  to 
stockholders,  at  the  end  of  the  fiscal  year  of  said  corpora- 
tion next  preceding  the  election  of  directors,  and  when  a 
director  has  been  elected  in  accordance  with  the  provi- 
sions of  this  act  it  shall  be  lawful  for  him  to  continue  as 
such  for  one  year  thereafter. 

When  any  person  elected  or  chosen  as  a  director  or 
oflEicer  or  selected  as  an  employee  of  any  bank  or  other 
corporation  subject  to  the  provisions  of  this  act  is  eligible 
at  the  time  of  his  election  or  selection  to  act  for  such  bank 
or  other  corporation  in  such  capacity  his  eligibility  to  act 
in  such  capacity  shall  not  be  affected  and  he  shall  not 
become  or  be  deemed  amenable  to  any  of  the  provisions 
hereof  by  reason  of  any  change  in  the  affairs  of  such  bank 
or  other  corporation  from  whatsoever  cause,  whether 
specifically  excepted  by  any  of  the  provisions  hereof  or 
not,  until  the  expiration  of  one  year  from  the  date  of  his 
election  or  employment. 

Note. — See  Sec.  25,  Federal  reserve  act,  page  165,  post,  in  refer- 
ence to  directors  of  foreign  branches. 

ENFORCEMENT  OF  ACT  IN  REFERENCE  TO  INTERLOCK- 
ING DIRECTORATES. 

235.  Sec.    11. — That  authority  to  enforce  compliance  ^^Act  Oct.  i5, 
with  sections  two,  three,  seven  and  eight  of  this  act  by  as    stat."    l.) 
the  persons  respectively  subject  thereto  is  hereby  vested :  '^^* 
in  the  Interstate  Commerce  Commission  where  applicable 
to  common  carriers,  in  the  Federal  Reserve  Board  where 
applicable  to  banks,  banking  associations  and  trust  com- 
panies, and  in  the  Federal  Trade  Commission  where  ap- 
plicable to  all  other  character  of  commerce,  to  be  exer- 
cised as  follows: 

Whenever  the  commission  or  board  vested  with  juris- 
diction thereof  shall  have  reason  to  believe  that  any 
person  is  violating  or  has  violated  any  of  the  provisions 
of  sections  two,  three,  seven,  and  eight  of  this  act,  it  shall 
issue  and  serve  upon  such  person  a  complaint  stating  its 
charges  in  that  respect,  and  containing  a  notice  of  a 
hearing  upon  a  day  and  at  a  place  therein  fixed  at  least 
thirty  days  after  the  service  of  said  complaint.     The 


38  ORGANIZATION   AND  POWERS. 

person  so  complained  of  shall  have  the  right  to  appear 
at  the  place  and  time  so  fixed  and  show  cause  why  an 
order  should  not  be  entered  by  the  commission  or  board 
requiring  such  person  to  cease  and  desist  from  the  vio- 
lation of  the  law  so  charged  in  said  complaint.  Any 
person  may  make  application,  and  upon  good  cause  shown 
may  be  allowed  by  the  commission  or  board,  to  intervene 
and  appear  in  said  proceeding  by  counsel  or  in  person. 
The  testimony  in  any  such  proceeding  shall  be  reduced  to 
writing  and  filed  in  the  office  of  the  commission  or  board. 
If  upon  such  hearing  the  commission  or  board,  as  the 
case  may  be,  shall  be  of  the  opinion  that  any  of  the  pro- 
visions of  said  sections  have  been  or  are  being  violated,  it 
shall  make  a  report  in  writing  in  which  it  shall  state  its 
findings  as  to  the  facts,  and  shall  issue  and  cause  to  be 
served  on  such  person  an  order  requiring  such  person  to 
cease  and  desist  from  such  violations,  and  divest  itself  of 
the  stock  held  or  rid  itself  of  the  directors  chosen  con- 
trary to  the  provisions  of  sections  seven  and  eight  of  this 
act,  if  any  there  be,  in  the  manner  and  within  the  time 
fixed  by  said  order.  Until  a  transcript  of  the  record  in 
such  hearing  shall  have  been  filed  in  a  circuit  court  of 
appeals  of  the  United  States,  as  hereinafter  provided, 
the  commission  or  board  may  at  any  time,  upon  such  no- 
tice and  in  such  manner  as  it  shall  deem  proper,  modify 
or  set  aside,  in  whole  or  in  part,  any  report  or  any  order 
made  or  issued  by  it  under  this  section. 

If  such  person  fails  or  neglects  to  obey  such  order  of 
the  commission  or  board  while  the  same  is  in  effect,  the 
commission  or  board  may  apply  to  the  circuit  court  of 
appeals  of  the  United  States,  within  any  circuit  where 
the  violation  complained  of  was  or  is  being  committed 
or  where  such  person  resides  or  carries  on  business,  for 
the  enforcement  of  its  order,  and  shall  certify  and  file 
with  its  application  a  transcript  of  the  entire  record  in 
the  proceeding,  including  all  the  testimony  taken  and  the 
report  and  order  of  the  commission  or  board.  Upon  such 
filing  of  the  application  and  transcript  the  court  shall 
cause  notice  thereof  to  be  served  upon  such  person  and 
thereupon  shall  have  jurisdiction  of  the  proceeding  and 
of  the  question  determined  therein,  and  shall  have  power 
to  make  and  enter  upon  the  pleadings,  testimony,  and 
proceedings  set  forth  in  such  transcript  a  decree  affirm- 
ing, modifj'ing,  or  setting  aside  the  order  of  the  commis- 
sion or  board.  The  findings  of  the  commission  or  board 
as  to  the  facts,  if  supported  by  testimony,  shall  be  con- 
clusive. If  either  party  shall  apply  to  the  court  for  leave 
to  adduce  additional  evidence,  and  shall  show  to  the  satis- 
faction of  the  court  that  such  additional  evidence  is  ma- 
terial and  that  there  were  reasonable  grounds  for  the 
failure  to  adduce  such  evidence  in  the  proceeding  before 
the  commission  or  board,  the  court  may  order  such  addi- 
tional evidence  to  be  taken  before  the  commission   oi 


ORGANIZATION   AND  POWERS.  39 

board  and  to  be  adduced  upon  the  hearing  in  such  man- 
ner and  upon  such  terms  and  conditions  as  to  the  court 
may  seem  proper.  The  commission  or  board  may  modify 
its  findings  as  to  the  facts,  or  make  new  findings,  by  rea-. 
son  of  the  additional  evidence  so  taken,  and  it  shall  file 
such  modified  or  new  findings,  which,  if  supported  by 
testimon}',  shall  be  conclusive,  and  its  recommendations, 
if  any,  for  the  modification  or  setting  aside  of  its  original 
order,  with  the  return  of  such  additional  evidence.  The 
judgment  and  decree  of  the  court  shall  be  final,  except 
that  the  same  shall  be  subject  to  review  by  the  Supreme 
Court  upon  certiorari  as  provided  in  section  two  hundred 
and  forty  of  the  Judicial  Code. 

Any  party  required  by  such  order  of  the  commission 
or  board  to  cease  and  desist  from  a  violation  charged 
may  obtain  a  review  of  such  order  in  said  circuit  court  of 
appeals  by  filing  in  the  court  a  written  petition  praying 
that  the  order  of  the  commission  or  board  be  set  aside. 
A  copy  of  such  petition  shall  be  forthwith  served  upon 
the  commission  or  board,  and  thereupon  the  commis- 
sion or  board  forthwith  shall  certify  and  file  in  the  court 
a  transcript  of  the  record  as  hereinbefore  provided. 
Upon  the  filing  of  the  transcript  the  court  shall  have  the 
same  jurisdiction  to  afhrm,  set  aside,  or  modify  the  order 
of  the  commission  or  board  as  in  the  case  of  an  applica- 
tion by  the  commission  or  board  for  the  enforcement  of 
its  order,  and  the  findings  of  the  commission  or  board  as 
to  the  facts,  if  supported  bj-  testimony,  shall  in  like  man- 
ner be  conclusive. 

The  jurisdiction  of  the  circuit  court  of  appeals  of  the 
United  States  to  enforce,  set  aside,  or  modify  orders  of 
the  commission  or  board  shall  be  exclusive. 

Such  proceedings  in  the  circuit  court  of  appeals  shall 
be  given  precedence  over  other  cases  pending  therein, 
and  shall  be  in  every  way  expedited.  No  order  of  the 
commission  or  board  or  the  judgment  of  the  court  to 
enforce  the  same  shall  in  any  wise  relieve  or  absolve  any 
person  from  any  liability  under  the  antitrust  acts. 

Complaints,  orders,  and  other  processes  of  the  commis- 
sion or  board  under  this  section  may  be  served  by  any- 
one duly  authorized  by  the  commission  or  board,  either 
(a)  by  delivering  a  copy  thereof  to  the  person  to  be  served, 
or  to  a  member  of  the  partnership  to  be  served,  or  to  the 
president,  secretary,  or  other  executi\  e  officer  or  a  direc- 
tor of  the  corporation  to  be  served;  or  (b)  by  leaving  a 
copy  thereof  at  the  principal  office  or  place  of  business  of 
such  person;  or  (c)  by  registering  and  mailing  a  copy 
thereof  addressed  to  such  person  at  his  principal  office  or 
place  of  business.  The  verified  return  by  the  person  so 
serving  said  complaint,  order,  or  other  process  setting 
forth  the  manner  of  said  service  shall  be  proof  of  the 
same,  and  the  return  post-office  receipt  for  said  complaint, 
order,  or  other  process  registered  and  mailed  as  aforesaid 
Bhall  be  proof  of  the  service  of  the  same. 


40  OEGANIZATTON   AND  PO^\^JRS. 

OATH  REQUIRED  FROM  DIRECTORS. 

1864*  c"°io6:  226-  ^^^'  5147.— Each  director,  when  appointed  or 
sec.  9 ;  13  Stat!  elected,  shall  take  an  oath  that  he  will,  so  far  as  the  duty 
devolves  on  him,  diligently  and  honestly  administer  the 
affairs  of  such  association,  and  will  not  knowingly  violate, 
or  willingly  permit  to  be  violated,  any  of  the  provisions 
of  this  title,  and  that  he  is  the  owner  in  good  faith,  and  in 
his  own  right,  of  the  number  of  shares  of  stock  required 
by  this  title,  subscribed  by  him,  or  standing  in  his  name 
on  the  books  of  the  association,  and  that  the  same  is  not 
hypothecated,  or  in  any  way  pledged,  as  security  for  any 
loan  or  debt.  Such  oath,  subscribed  by  the  director  mak- 
ing it,  and  certified  by  the  officer  before  whom  it  is  taken, 
shall  be  immediately  transmitted  to  the  Comptroller  of 
the  Currency,  and  shall  be  filed  and  preserved  in  his  Office. 

FILLING  VACANCIES. 

180?  c"°%i:     237.  Sec.   5148.— Any  vacancy  in  the  board  shall  be 
sec.  '  10 ;    13  filled  by  appointment  bj^  the  remaining  directors,  and 

any  director  so  appointed  shall  hold  his  place  until  the 

next  election. 

PROCEEDINGS  WHERE   NO  ELECTION  IS  HELD  ON  THE 
PROPER  DAT. 

186?  c"°i06;  ^^^-  S^c-  5149. — If,  from  any  cause,  an  election  of  di- 
|ec.^'  10 ;  13  rectors  is  not  made  at  the  time  appointed,  the  association 
shall  not  for  that  cause  be  dissolved,  but  an  election  may 
be  held  on  any  subsequent  day,  thirty  days'  notice  thereof 
in  all  cases  having  been  given  in  a  newspaper  published 
in  the  cit3^  town,  or  county  in  which  the  association  is 
located;  and  if  no  newspaper  is  published  in  such  city, 
town,  or  county,  such  notice  shall  be  published  in  a  news- 
paper published  nearest  thereto.  If  the  articles  of  asso- 
ciation do  not  fix  the  day  on  which  the  election  shall  be 
held,  or  if  no  election  is  held  on  the  day  fixed,  the  day  for 
the  election  shall  be  designated  by  the  board  of  directors 
in  their  by-laws,  or  otherwise ;  or  if  the  directors  fail  to 
fix  the  day,  shareholders  representing  two-thirds  of  the 
shares  may  do  so. 

ELECTION  OF  PRESIDENT  OF  THE  BOARD. 

180?  c"°%o'     ^^^-  ^^^-  ^^^^- — ^^^  ^^  ^^^^  directors,  to  be  chosen  by 
Bee.  ^ ;  13  Stat!  the  board,  shall  be  the  president  of  the  board. 

L.,  102. 

INDIVIDUAL  LIABILITY  OF  SHAREHOLDERS. 

18G?  c"°'i06'     ^^^-  ^^^-    ^^^^- — "^^^^  shareholders   of  every  national 

Bee.  '  12;   ^i.j  banking  association  shall  be  held  individually  responsi- 

stat.  L.,  102,    Yf\Q^  equally  and  ratably,  and  not  one  for  another,  for  all 

contracts,  debts,  and  engagements  of  such  association,  to 

the  extent  of  the  amount  of  their  stock  therein,  at  the 

par  value  thereof,  in  addition  to  the  amount  invested  in 


ORGANIZATION   AND   POWERS.  41 

siicli  shares;  except  that  shareholders  of  any  banking 
association  now  existing  under  State  laws,  havincr  not 
less  than  five  millions  of  dollars  of  capital  actually  paid 
in.  and  a  surplus  of  twenty  per  centum  on  hand,  both  to 
be  determined  by  the  Comptroller  of  tlie  Currency,  shall 
be  liable  only  to  the  amount  invested  in  their  shares; 
and  such  surplus  of  twenty  per  centum  shall  be  kept 
undiminished,  and  be  in  addition  to  tl^e  surplus  provided 
for  in  this  title;  and  if  at  any  time  there  is  a  deficiency 
in  such  surplus  of  twenty  per  centum,  such  association 
shall  not  pay  any  dividends  to  its  shareholders  until  tho 
deficiency  is  made  good;  and  in  case  of  such  deficiency, 
the  Comptroller  of^the  Currency  may  compel  the  asso- 
ciation to  close  its  business  and  wind  up  its  affairs  under 
the  provisions  of  chapter  four  ^  of  this  title. 

Note. — See  act  of  June  30,  1S76,  paragraph  521,  post,  for  en- 
forcement of  liability  prescribed  by  this  section  in  cases  of 
voluntary  liquidation. 

INDITIDUAL  LIABILITY  OF  SHAREHOLDERS— LIABILITY 
OF  SHAREHOLDERS  WHO  HATE  TRANSFERRED  THEIR 
SHARES. 

241.  Sec  23. — The  stockholders  of  every  national  bank-  ^^^ff  ^^c.  ^2^3, 
ing  association  shall  be  held  individually  responsible  for  p  'stat.'  l.', 
all  contracts,  debts,  and  engagements  of  such  association. 

each  to  the  amount  of  his  stock  therein,  at  the  par  value 
thereof  in  addition  to  the  amount  invested  in  such  stock. 
The  stockholders  in  any  national  banking  association  who 
shall  have  transferred  their  shares  or  registered  the  trans- 
fer thereof  within  sixty  daj's  next  before  the  date  of  the 
failure  of  such  association  to  meet  its  obligations,  or  with 
knowledge  of  such  impending  failure,  shall  be  liable  to 
the  same  extent  as  if  they  had  made  no  such  transfer,  to 
the  extent  that  the  subsequent  transferee  fails  to  meet 
such  liability;  but  this  provision  shall  not  be  construed  to 
affect  in  any  way  an}-  recourse  which  such  shareholders 
might  otherwise  have  against  those  in  whose  names  such 
shares  are  registered  at  the  time  of  such  failure. 

EXECXTORS,  TRUSTEES,  ETC..  NOT  PERSONALLY  LIABLE. 

242.  Sec.  5152. — Persons  holding  stock  as  executors,  ad-  ,„-5?*  •^""^,«i' 
mmistrators,  guardians,  or  trustees,  shall  not  be  person- spc     63:     13 
ally  subject  to  any  liabilities  as  stockholders;  but  the  ^*'**"  ^■' ^^^' 
estates  and  funds  in  their  hands  shall  be  liable  in  like 

manner  and  to  the  same  extent  as  the  testator,  intestate, 
ward,  or  person  interested  in  such  trust-funds  would  be, 
if  living  and  competent  to  act  and  hold  the  stock  in  his 
own  name. 


1  Chapter  5  of  this  compilation. 


42  ORGANIZATION   AND  POWERS. 

NATIONAL    BANKING   ASSOCIATIONS    TO    BE    DEPOSITA 
KIES  OF  PUBLIC  MONEYS. 

1864*  c"°i06'     ^^^-  ^®^-  ^^^^  [^^  amended  1907]. — All  national  banking 
sec.  '  45;     13  associations,  designated  for  that  purpose  by  the  Secre- 
^  Act.^Mar.^'3,  tary   of  the   Treasur}^,   shall  be   depositaries  of  public 
sec*\  •  31  itat  ^^^^^^^Ji  Under  such  regulations  as  may  be  prescribed  by 
L.,'i448.         'the  Secretary;  and  they  ma}'  also  be  employed  as  finan- 
1907!^"  c^Yoit;  tial  agents  of  the  Government ;  and  they  shall  perform 
L*^i2bo^  ^^'^*"  '^^^  such  reasonable  duties,  as  depositaries  of  public  money 
and  financial  agents  of  the  Government,  as  may  be  re- 
quired of  them.     The  Secretary  of  the  Treasury  shall 
require  the  associations  thus  designated  to  give  satisfac- 
tory security,  by  the  deposit  of  United  States  bonds  and 
otherwise,  for  the  safe-keeping  and  prompt  payment  of 
the  public  money  deposited  with  them,  and  for  the  faith- 
ful performance  of  their  duties  as  financial  agents  of  the 
Government :  Provided,  That  the  Secretary  shall,  on  or 
before  the  first  of  Januaiw  of  each  year,  make  a  public 
statement  of  the  securities  required  during  that  year  for 
such  deposits.     And  every  association  so  designated  as 
receiver  or  depositary  of  the  public  money  shall  take  and 
receive  at  par  all  of  the  national  currency  bills,  by  what- 
ever association  issued,  which  have  been  paid  into  the 
Government  for  internal  revenue,  or  for  loans  or  stocks : 
Provided,  That  the  Secretary  of  the  Treasury  shall  dis- 
tribute the  deposits  herein  provided  for,  as  far  as  practi- 
cable, equitably  between  the  different  States  and  sections. 

Note. — For  other  .provisions  relating  to  duties  and  liabilities  of 
depositaries  see  following  sections  of  the  Revised  Statutes  of  the 
United   States : 

Sec.  3640.  Transfer  of  moneys  from  depositaries  to  Treasury 
authorized. 

Sec.  3641.  Transfer  of  postal   deposits. 

Sec.  3642.  Accounts  of  postal  deposits. 

Sec.  3643.  Entry  of  each  deposit,  transfer,  and  payment. 

Sec.  3644.  Public  moneys  in  Treasury  and  depositaries  subject 
to   draft   of   Treasurer. 

Sec.  3645.  Regulations  for  presentment  of  drafts. 

Sec.  3646.  Duplicates  for  lost  or  stolen  checks  authorized. 

Sec.  3647  and  amendments.  Duplicate  check  when  officer  who 
issued  is  dead. 

Sec.  3648  and  amendments.  Advances  of  public  money  pro- 
hibited. 

Sec.  3649.  Examination  of  depositaries. 

See  also  Government  Depositaries,  paragraphs  730-738,  post. 

GOTERNMENT  DEPOSITS  IN  FEDERAL  RESERTE  BANKS. 

Act  Dec.  23,     244.  Sec.  15. — The  moneys  held  in  the  general  fund  of 

:^is^^'sta't!'  ^L.ithe  Treasury,  except  the  five  per  centum  fund  for  the 

2G5.  redemption  of  outstanding  national-bank  notes  and  the 

funds  provided  in  this  act  for  the  redemption  of  Federal 

reserve  notes  may,  upon  the  direction  of  the  Secretary  of 

the  Treasury,  be  deposited   in  Federal  reserve  banks, 


ORGAXIZATIOX   AND  POWERS.  43 

which  banks,  when  required  by  the  Secretary  of  the 
Treasury,  shall  act  as  fiscal  agents  of  the  United  States; 
and  the  revenues  of  the  Government  or  any  part  thereof 
may  be  deposited  in  such  banks,  and  disbursements  may 
be  made  by  checks  drawn  against  such  deposits. 

Xo  public  funds  of  the  Philippine  Islands,  or  of  the 
postal  savings,  or  any  Government  funds,  shall  be  de- 
posited in  the  continental  United  States  in  any  bank  not 
belonging  to  the  system  established  by  this  act:  Pro- 
vided,  however,  That  nothing  in  this  act  shall  be  con- 
strued to  deny  the  right  of  the  Secretary  of  the  Treasury 
to  use  member  banks  as  depositories. 

Note. — Section  7  of  the  act  approved  April  24,  1917,  known  as 
"An  act  to  autliorize  an  issue  of  bonds  to  meet  expenditures  for 
the  national  security  and  defense,  and,  for  the  purpose  of  assist- 
ing in  the  prosecution  of  the  war,  to  extend  credit  to  foreign  gov- 
ernments, and  for  other  purposes."  authorizes  the  Secretary  to 
deposit  proceeds  of  sale  of  such  bonds  in  uonmember  banks  un- 
der certain  circumstances.  For  full  text  of  section  7  see  page 
184,  post. 

CONTERSION  OF  STATE  BANKS   INTO  NATIONAL  BANK- 
ING ASSOCIATIONS. 

245.  Sec.  5154. — Anv  bank  incorporated  by  special  law    -'^ct  June  3. 

.  ,-,  f      1     "   T-r     •  ,       1     r^ ,  •  1  1  1od4,      C.      lOo, 

of  any  State  or  of  the  United  States  or  organized  under  sec.  44;  la 
the  general  laws  of  any  State  or  of  the  United  States  and  ^*Act^f>e"^23. 
having  an  unimpaired  capital  sufficient  to  entitle  it  to  i|i3,g^sec.  8; 
become  a  national  banking  association  under  the  pro-  258. 
visions  of  the  existing  laws  may,  by  the  vote  of  the 
shareholders  owning  not  less  than  fifty-one  per  centum 
of  the  capital  stock  of  such  bank  or  banking  association, 
with  the  approval  of  the  Comptroller  of  the  Currency 
be  converted  into  a  national  banking  association,  with 
any  name  approved  by  the  Comptroller  of  the  Currency : 
Provided,  however ,  That  said  conversion  shall  not  be  in 
contravention  of  the  State  law.  In  such  case  the  articles 
of  association  and  organization  certificate  may  be  exe- 
cuted by  a  majority  of  the  directors  of  the  bank  or  bank- 
ing institution,  and  the  certificate  shall  declare  that  the 
owners  of  fifty-one  per  centum  of  the  capital  stock  have 
authorized  the  directors  to  make  such  certificate  and  to 
change  or  convert  the  bank  or  banking  institution  into  a 
national  association.  A  majority  of  tlie  directors,  after 
executing  the  articles  of  association  and  the  organization 
certificate,  sliall  have  power  to  execute  all  other  papers 
and  to  do  whatever  may  be  required  to  make  its  organiza- 
tion perfect  and  complete  as  a  national  association.  The 
shares  of  any  such  bank  may  continue  to  be  for  the  same 
amount  each  as  they  were  before  the  conversion,  and  the 
directors  may  continue  to  be  directors  of  the  association 
until  others  are  elected  or  appointed  in  accordance  with 
the  provisions  of  the  statutes  of  the  United  States.  When 
the  Comptroller  has  given  to  such  bank  or  banking  asso- 
ciation a  certificate  that  the  provisions  of  this  Act  have 


44  ORGANIZATION   AND  POWERS. 

been  complied  with,  such  bank  or  banking  association, 
and  all  its  stockholders,  officers,  and  employees,  shall 
have  the  same  powers  and  privileges,  and  shall  be  subject 
to  the  same  duties,  liabilities,  and  regulations,  in  all  re- 
spects, as  shall  have  been  prescribed  by  the  Federal  Re- 
serve Act  and  by  the  national  banking  Act  for  associa- 
tions originally  organized  as  national  banking  associa- 
tions. 

Note. — The  act  of  1864  authorized  any  State  bank  which  was  a 
stockholder  in  any  other  bank,  by  authority  of  State  laws,  to  con- 
tinue to  hold  its  stock,  although  either  bank  or  both  might  have 
become  converted  into  national  banks.  This  provision  was  Incor- 
porated in  section  5154,  United  States  Revised  Statutes,  but  was 
stricken  out  in  the  revision  of  this  section  by  the  act  of  December 
23,  1913. 

STATE  BANKS  HATING  BRANCHES. 

i865,*c.^7s?se?:     246.  Scc.   5155.— It  shall  be  lawful  for  any  bank  or 

7 :  13  Stat.  L.,  banking  association  organized  under  State  laws,  and  hav- 

4S4  ^  .  .     .  .        ' 

ing  branches,  the  capital  being  ]oint  and  assigned  to  and 
used  by  the  mother  bank  and  branches  in  definite  propor- 
tions, to  become  a  national  banlving  association  in  con- 
formity with  existing  laws,  and  to  retain  and  keep  in 
operation  its  branches,  or  such  one  or  more  of  them  as  it 
may  elect  to  retain;  the  amount  of  the  circulation  re- 
deemable at  the  mother  bank,  and  each  branch,  to  be 
regulated  by  the  amount  of  capital  assigned  to  and  used 
by  each. 

RESERYATION  OF  RIGHTS  OF  ASSOCIATIONS  ORGANIZED 
UNDER  ACT  OF  1863. 

1864*  i"°ioi:  247.  Sec.  5156.— Nothing  in  this  title  shall  effect  any 
Stat  l"'ii8^^'^PP*^^^^"^^^^^  made,  acts  done,  or  proceedings  had  or 
coimnenced  prior  to  the  third  day  of  June,  eighteen  hun- 
dred and  sixty-four,  in  or  toward  the  organization  of  any 
national  banking  association  under  the  act  of  Februarv 
twenty-five,  eighteen  hundred  and  sixty-three;  but  all 
associations  which,  on  the  third  day  uf  June,  eighteen 
hundred  and  sixty-four,  were  organized  or  commenced  to 
V  be  organized  under  that  act,  shall  enjoy  all  the  rights  and 
privileges  granted,  and  be  subject  to  all  the  duties,  liabili- 
ties, and  restrictions  imposed  by  this  title,  notwithstand- 
ing all  the  steps  prescribed  by  this  title  for  the  organiza- 
tion of  associations  were  not  pursued,  if  such  associations 
were  duly  organized  under  that  act- 


OEGANIZATION   AND  POWERS.  45 


46  ORGAXiZATiUJS'    AND   POWEi^, 


OBTAINING  AND  ISSUING  CIRCULATING  NOTES. 


47 


CHAPTER  III. 


OBTAINING  AXD  ISSUING  CIRCULATING   NOTES. 


300.  5157.  What  associations  are  gov- 
erned by  provisions  of 
cliapters  two,  three,  and 
four. 

801.  5158.  Registered  bonds  intended 
by  the  term  "United 
States  bonds." 

302.  Act  December  23,  1913,  as  amend- 

ed. Deposit  of  bonds  not 
required  before  issuance 
of  certificate  authorizing 
t  li  e  commencement  of 
business. 

303.  Act  December  21,  1905.     Two  per 

cent  Panama  Canal 
bonds  have  all  rights  and 
privileges  accorded  to 
other  two  per  cent  bonds 
of  the  United  States. 

304.  5160.  Increase     or    reduction    of 

deposit  to  correspond 
with  capital. 

305.  5161.  Exchange     of     coupon     for 

registered  bonds. 

306.  5162.  Manner    of    making    trans- 

fers of  bonds. 

307.  5163.  Kegistrv   of   transfers. 

308.  5164.  Notice    of    transfer    to    be 

given  to  association  in- 
terested. 

309.  5165.  Examination      of      registry 

and  bonds. 

310.  5160.  Annual       examination       of 

bonds  by  association. 

311.  5167.  General  provisions  respect- 

ing bonds. 

312.  Act    June    20,    1874.  Withdrawal 

of  circulating  notes  on 
deposit  of  lawful  money 
and  withdrawal  of  bonds. 

313.  Act    July    12,    1882.      Amount    <.f 

bonds  required  to  be  on 
deposit;  reduction  of 
amount  or  retirement  in 
full   of  circulating  notes. 

314.  Act  July  12,  1882,  and  act  March 

4,  1907.  Limitation  on 
withdrawal  of  bonds ; 
consent  of  Comptroller  of 
Currency  and  Secretary 
of  the  Treasury  neces- 
sary. 

161312°— 20 4 


315.  Act  December  23,  1913.     Refund- 

ing of  bonds  under  Fed- 
eral reserve  act ;  i-etire- 
ment  of  circulating  notes. 

316.  Act    December    23,    1913.      Pur- 

chase of  United  States 
bonds  by  Federal  reserve 
banks. 

317.  Act  December  23,  1913.     Issue  of 

circulating  notes  to  Fed- 
eral reserve  banks  on  se- 
curity of  United  States 
bonds :  circulating  notes 
so  issued  obligations  of 
Federal  reserve  bank. 
Act  December  23,  1913.  Issue  of 
Treasury  gold  notes  of 
the  United  States  in  ex- 
change for  certain  United 
States  bonds. 

5168.  Comptroller  to  determine 
if  association  can  com- 
mence business. 

5169.  Certificate  of  authority  to 
commence  banking  to  be 
issued. 

5170.  Publication  of  certificate. 

5171.  Repealed  by  act  July  12, 
1SS2. 

Act  March  14,  1900,  as  amended. 
Delivery  of  circulating 
notes. 

5172.  Printing    denominations 

and  form  of  the  circulat- 
ing notes. 

325.  Act  June  20,  1874.    Charter  num- 

ber to  be  printed  on 
notes. 

326.  Act   March   3,   1875.      Distinctive 

paper  for  printing  notes. 

327.  5173.  Plates  and  dies  to  be  under 

control  of  the  Comptrol- 
ler ;  expenses  of  Cur- 
rency Bureau  to  be  paid 
out  of  proceeds  of  taxes, 
or  duties,  assossed  and 
collected  on  the  circula- 
tion of  national  banking 
asociations. 

5174.  Examination  of  plates  and 
dies. 

Act  October  5,  1917.  I.iinit  to 
issue  of  notes  under  live 
dollars. 

49 


318. 

319. 

320. 

321. 
322. 

323. 
324. 


82S. 
329. 


50 


OBTAINING  AND  ISSUING  CIRCULATING   NOTES. 


330.  5176.  Repealed   by   act    July    12, 

1882. 

331.  5177.  Repealed    by    act    January 

14,  1875. 

332.  Act  of  January  14,  1875.     Aggre- 

gate amount  of  circulat- 
ing notes  not  limited. 

333.  5178.  Repealed    by    act    January 

14,  1875. 

334.  5179.  Repealed  by  act  January 

14,  1875. 

335.  5180.  Repealed  by  act  January 

14,  1875. 

336.  5181.  Repealed    by    act    January 

14,  1875. 

337.  5182.  For     what     demands     na- 

tional-bank notes  may. be 
received. 

338.  5183.  Issue    of    post    notes,    etc., 

prohibited. 

339.  5184.  Destroying     and     replacing 

worn-out    and    mutilated 
notes. 


340.  Act   June   23,    1874.     Maceration 

of  national-bank  notes. 

341.  5185.  Organization      of      assocla- 

tion.s  to  issue  gold  notes. 

342.  5186.  Reserve     requirements     for 

gold  banks. 

343.  Act  of  February  14,  1880.     Con- 

version of  national  gold 
banks  into  currency 
banks. 

344.  5187.  Penalty    for    issuing   circu- 

lating notes  to  unauthor- 
ized  associations. 

345.  Act   March   4,    1909,    section   175, 

formerly  section  5188, 
Revi.sed  Statutes.  Pen- 
alty for  imitating  bank 
circulation.  Use  of  same 
for  advertising  purposes, 

346.  Act   March   4,    1909,   section   176, 

formerly  section  5189, 
Revised  Statutes.  Pen- 
alty for  mutilating  cir- 
culation. 


WHAT   ASSOCIATIONS   ARE   GOYERNED    BY   PROYISIONS 
OF  CHAPTERS  TWO,  THREE,  AND  FOUR. 

Sec.  5157.  R.  s.  300.  Sec.  5157. — The  provisions  of  chapters  two,  three, 
and  four  ^  of  this  title,  which  are  expressed  without  re- 
strictive words,  as  applying  to  "  national  banking  associ- 
ations," or  to  "  associations,"  apply  to  all  associations 
organized  to  carry  on  the  business  of  banking  under  any 
act  of  Congress. 

Note. — Federal  reserve  banks  are  not  governed  by  this  act,  but 
by  the  Federal  reserve  act. 

REGISTERED  BONDS  INTENDED  BY  THE  TERM  "  UNITED 
STATES  BONDS." 

isef  c°°i06'  ^^^-  ^^^-  5158.— The  term  "United  States  bonds,"  as 
sec.  4 ;  13  Stat,'  uscd  throughout  this  chapter,  shall  be  construed  to  mean 
L.,  100.  registered  bonds  of  the  United  States. 


DEPOSIT  OF  BONDS  NOT  REQUIRED  BEFORE  ISSUANCE 
OF  CERTIFICATE  AUTHORIZING  THE  COMMENCEMENT 
OF  BUSINESS. 

loi.f  ?eT'  ii-     ^^^'  ^®°-    ■'•'''• — ^^  niuch  of  the  provisions  of  section 
38    'stat.'    L.;  fifty-one  hundred  and  fifty-nine  of  the  Revised  Statutes 
^Vct  .Tune  21,  of  the  United  States,  and  section  four  of  the  Act  of  June 
1917,  sec.  9.     twentieth,  eighteen  hundred  and  seventy-four,  and  sec- 
tion eight  of  the  Act  of  July  twelfth,  eighteen  hundred 
and  eighty-two,  and  of  any  other  provisions  of  existing 
statutes   as  require   that  before   any   national   banking 
association   shall   be   authorized   to    commence   banking 
business  it  shall  transfer  and  deliver  to  the  Treasurer  of 
the  United   States   a  stated   amount  of  United   States 
registered  bonds,  and  so  much  of  those  provisions  or  of 


*  Chapters  three,  four,  and  five  of  this  compilation. 


OBTAINING  AND   ISSUING   CIRCULATING  NOTES.  51 

any  other  provisions  of  existing  statutes  as  require  any 
national  banking  association  now  or  hereafter  organized 
to  maintain  a  minimum  deposit  of  such  bonds  with  the 
Treasurer  is  hereby  repealed. 

ZloTE. — Section  5159  referred  to  above  is  as  follows :  "  Every  as- 
Bociation,  after  having  complied  with  the  provisions  of  this  title, 
preliminary  to  the  commencement  of  the  banking  business,  and 
before  it  shall  be  authorized  to  commence  banking  business  under 
this  title,  shall  transfer  and  deliver  to  the  Treasurer  of  the 
United  States  any  United  States  registered  bonds,  bearing  inter- 
est, to  an  amount  not  less  than  thirty  thousand  dollars  and  not 
less  than  one-third  of  the  capital  stock  paid  in.  Such  bonds 
shall  be  received  by  the  Treasurer  upon  deposit,  and  shall  be 
by  him  safely  kept  in  his  office,  until  they  shall  be  otherwise 
disposed  of,  in  pursuance  of  the  provisions  of  this  title."  (See 
also  note  under  section  5160.) 

TWO  PER  CENT  PANAMA  CANAL  BONDS  HATE  ALL 
RIGHTS  AND  PRIVILEGES  ACCORDED  TO  OTHER  TWO 
PER  CENT  BONDS  OF  THE  UNITED  STATES.  ACT  DE- 
CEMBER 21,   1905. 

303.  Sec.  1. — That  the  two  per  cent  bonds  of  the  United  Act  Dec.  21, 
States  authorized  by  section  eight  of  the  act  entitled  "  An  34^st'at.^  u',  5.' 
act  to  pro^ade  for  the  construction  of  a  canal  connecting 

the  waters  of  the  Atlantic  and  Pacific  oceans,"  approved 
June  twenty-eight,  nineteen  hundred  and  two,  shall  have 
all  the  rights  and  privileges  accorded  by  law  to  other  two 
per  cent  bonds  of  the  United  States,  and  every  national 
banking  association  having  on  deposit,  as  provided  by 
law,  such  bonds  issued  under  the  provisions  of  said  sec- 
tion eight  of  said  act  approved  June  twenty-eight,  nine- 
teen hundred  and  two,  to  secure  its  circulating  notes,  shall 
pay  to  the  Treasurer  of  the  United  States,  in  the  months 
of  January  and  July,  a  tax  of  one-fourth  of  one  per  cent 
each  half  year  upon  the  average  amount  of  such  of  its 
notes  in  circulation  as  are  based  upon  the  deposit  of  said 
two  per  cent  bonds;  and  such  taxes  shall  be  in  lieu  of  ex- 
isting taxes  on  its  notes  in  circulation  imposed  by  section 
fifty-two  hundred  and  fourteen  of  the  Revised  Statues. 

Note. — Only  bonds  available  as  security  for  national  bank  circu- 
lation are  the  consols  of  1930  2  per  cent  Panama  Canal  bonds,  and 
4  per  cent  bonds  of  1925. 

INCREASE  OR  REDUCTION  OF  DEPOSIT  TO  CORRESPOND 
WITH  CAPITAL. 

304.  Sec.  5160. — [The  deposit  of  bonds  made  hy  each  as-    Act  June  :i. 
sociation  shall  he  increased  as  its  capital  may  he  paid  uplfc.^'  1%;  ^"13 
or  increased,  so  that  every  associatio^i  shall  at  all  time!<  stat.  l.,  104. 
have  on  deposit  with  the  Treasurer  registered  United 

States  bonds  to  the  amount  of  at  least  one-third  of  its 
capital  stock  actually  paid  ?'n].  And  any  association  that 
may  desire  to  reduce  its  capital  or  close  up  its  business 
and  dissolve  its  organization,  may  take  up  its  bonds 
upon  returning  to  the  Comptroller  its  circulating  notes 
in  the  proportion  hereinafter  required,  or  may  take  up 


52  OBTAINING   AND   ISSUING   CmCULATING   NOTES. 

any  excess  of  bonds  beyond  [one-third  of  its  capital 
stock],  and  upon  which  no  circulating  notes  have  been 
delivered. 

Note. — All  provisions  of  law  requiring  national  banking  associa- 
tions to  maintain  a  minimum  deposit  of  bonds  were  repealed  by 
the  act  of  June  21,  1917.  See  paragraph  302  ante.  Prior  to  the 
passage  of  that  act  provisions  of  sections  .5159  and  5160  requiring 
national  banks  organized  prior  to  December  23,  1913,  to  deposit 
bonds  to  an  amount  not  less  than  $30,000  and  not  less  than  one- 
third  of  the  capital  stock  paid  in  were  held  to  be  modi  tied  by  the 
acts  of  June  20,  1874,  and  July  12,  1882.  Section  4  of  the  act  of 
June  20,  1874,  which  follows  section  5167,  provided  in  part  that  the 
amount  of  bonds  on  deposit  for  circulation  should  not  be  reduced 
below  $.50,000.  That  fixed  the  amount  of  bonds  required  to  be  de- 
posited by  national  banks  organized  prior  to  December  23,  1913, 
and  having  a  capital  of  over  $150,000.  National  banks  having  a 
capital  of  $150,000  or  less  were  not  required  to  keep  on  deposit 
bonds  in  excess  of  one-fourth  of  their  capital  stock  as  security 
for  their  circulating  notes  by  act  of  July  12,  1882,  chapter  290,  sec- 
tion 8.  This  act  follows  section  5167,  Revised  Statutes.  All  na- 
tional banks  having  a  capital  of  $150,000  or  less  and  organized 
prior  to  December  23,  1913,  were  required  to  keep  on  deposit  bonds 
equal  to  one-fourth  of  their  capital  stock,  and  if  any  bank  of  such 
capitalization  organized  since  December  23,  1913,  desired  to  take 
out  circulation  it  was  required  to  deposit  bonds  in  like  amount  as 
under  the  old  law.  Similarly  all  banks  organized  prior  to  Decem- 
ber 23,  1913,  with  capital  stock  of  over  $150,000  were  required  to 
keep  on  deposit  bonds  equal  to  $50,000,  and  any  bank  of  such 
capitalization  organized  since  December  23,  1913,  if  it  desired  to 
take  out  circulation,  was  required  to  deposit  bonds  in  that  amount. 

Section  18  of  the  Federal  Reserve  act  provides  that  after  De- 
cember 23,  1915,  which  is  2  years  from  the  passage  of  that  act, 
and  at  any  time  during  a  period  of  20  years  thereafter,  any  mem- 
ber bank  desiring  to  retire  the  whole  or  any  part  of  its  circulating 
notes,  may  file  with  the  Treasurer  of  the  United  States  an  appli- 
cation to  sell  for  its  account,  at  par  and  accrued  intei'est,  United 
States  bonds  securing  circulation  to  be  retired.  This  section  fur- 
ther provides  that  the  Federal  Reserve  Board,  may,  in  its  dis- 
cretion, require  the  Federal  reserve  banks  to  purchase  such  bonds 
from  the  banks  whose  applications  have  been  tiled  with  the 
Treasurer  at  least  10  days  before  the  end  of  any  quarterly  period 
at  which  the  Federal  Reserve  Board  may  direct  the  purchase  to 
be  made :  Provided,  That  Federal  reserve  banks  shall  not  be 
permitted  to  purchase  an  amount  to  exceed  $25,000,000  of  such 
bonds  in  any  one  year,  and  which  amount  shall  include  bonds 
acquired  under  section  4  of  that  act  by  the  Federal  reserve  bank. 

EXCHANGE  OF  COUPON  FOR  REGISTERED  BONDS. 

Act  June  3,     305.  Scc.  5161. — To  facilitate  a  compliance  with  the 

1864,    c.    lOfi',  two  preceding  sections,  the  Secretary  of  the  Treasury  is 

s4t.'  L.,  104.    authorized  to  receive  from  any  association,  and  cancel, 

any  United  States  coupon  bonds,  and  to  issue  in  lieu 

thereof  registered  bonds  of  like  amount,  bearing  a  like 

rate  of  interest,  and  having  the  same  time  to  run. 

MANNER  OF  MAKING  TRANSFERS  OF  BONDS. 

Act  June  3.     306.  Sec.  5162. — All  transfers  of  United  States  bonds, 

BPc!^'  19;  ^Tsiiade  by  any  association  under  the  provisions  of  this 

Stat.  L.,  'i05.  title,   shall   be   made   to  the   Treasurer   of   the   United 

States  in  trust  for  the  association,  with  a  memorandum 

written  or  printed  on  each  bond,  and  signed  by  the 


OBTAINING  AND   ISSUING  CIRCULATING   NOTES.  53 

cashier,  or  some  other  officer  of  the  association  making 
the  deposit.  A  receipt  shall  be  given  to  the  association, 
by  the  Comptroller  of  the  Currency,  or  by  a  clerk  ap- 
pointed by  him  for  that  purpose,  stating  that  the  bond 
is  held  in  trust  for  the  association  on  whose  behalf  the 
transfer  is  made,  and  as  security  for  the  redemption 
and  pa3'ment  of  any  circulating  notes  that  have  been  or 
maj'  be  delivered  to  such  association.  No  assignment  or 
transfer  of  any  such  bond  by  the  Treasurer  shall  be 
deemed  valid  unless  countersigned  by  the  Comptroller 
of  the  Currency. 

REGISTRY  OF  TRANSFERS. 

307.  Sec.  5163.— The  Comptroller  of  the  Currency  shall  jgef  l^\ol: 
keep  in  his  office  a  book  in  which  he  shall  cause  to  be  sees. '  19-20 ;  13 
entered,    immediately    upon    countersigning    it,    every   ^^^  ^■'  ■^®^" 
transfer  or  assignment  by  the  Treasurer  of  any  bonds 
belonging  to  a  national  banking  association,  presented 

for  his  signature.  He  shall  state  in  such  entry  the  name 
of  the  association  from  whose  accounts  the  transfer  is 
made,  the  name  of  the  party  to  whom  it  is  made,  and 
the  par  value  of  the  bonds  transferred. 

NOTICE   OF   TRANSFER   TO   BE   GIVEN   TO   ASSOCIATION 
INTERESTED. 

308.  Sec.  5164.— The  Comptroller  of  the  Currency  shall,  jgf  «*  June  ^3. 
immediately  upon  countersigning  and  entering  any  trans-  sec.  '  19 ;     li 
fer  or  assignment  by  the  Treasurer,  of  any  bonds  belong-    ^  •     •     **• 
ing  to  a  national  banking  association,  advise  by  mail  the 
association  from  whose  accounts  the  transfer  is  made,  of 

the  kind  and  numerical  designation  of  the  bonds,  and  the 
amount  thereof  so  transferred. 

EXAMINATION  OF  REGISTRY  AND  BONDS. 

309.  Sec.  5165.— The  Comptroller  of  the  Currency  shall  ^^Act  June^jS, 
have  at  all  times,  during  office  hours,  access  to  the  books  sec.  '  20":     v.l 
of  the  Treasurer  of  tbe  United  States  for  the  purpose  of  ^^**'  ^'  •^^^* 
ascertaining  the  correctness  of  any  transfer  or  assignment 

of  the  bonds  deposited  by  an  association,  presented  to  the 
Comptroller  to  countersign;  and  the  Treasurer  shall  have 
the  like  access  to  the  book  mentioned  in  section  fifty-one 
hundred  and  sixty-three,  during  office  hours,  to  ascertair 
the  correctness  of  the  entries  in  the  same;  and  the  Comp^ 
troller  shall  also  at  all  times  have  access  to  the  bonds  on 
deposit  with  the  Treasurer,  to  ascertain  their  amount  and 
condition. 

ANNUAL  EXAMINATION  OF  BONDS  BY  ASSOCIATION. 

310.  Sec.  5166. — Every  association  having  bonds  depos-     Act  Juno  3, 
ited  in  the  office  of  the  Treasurer  of  the  United  States  ^^^,?^'  25:  ^^n 
shall,  once  or  oftener  in  each  fiscal  year,  examine  and  stat.  l.,  iog. 
compare  the  bonds  pledged  by  the  association  with  the 

books  of  the  Comptroller  of  the  Currency  and  with  the 


54  OBTAINING  AND   ISSUING   CIRCULATING   NOTES. 

accounts  of  the  association,  and,  if  they  are  found  correct, 
to  execute  to  the  Treasurer  a  certificate  setting  forth  the 
different  kinds  and  the  amounts  thereof,  and  that  the 
same  are  in  the  possession  and  custod}^  of  the  Treasurer 
at  the  date  of  the  certificate.  Such  examination  shall  be 
made  at  such  time  or  times,  during  the  ordinary  business 
hours,  as  the  Treasurer  and  the  Comptroller,  respectively, 
may  select,  and  may  be  made  by  an  officer  or  agent  of 
such  association,  duly  appointed  in  writing  for  that  pur- 
pose; and  his  certificate  before  mentioned  shall  be  of 
like  force  and  validity  as  if  executed  by  the  president  or 
cashier.  A  duplicate  of  such  certificate,  signed  by  the 
Treasurer,  shall  be  retained  by  the  association. 

GENERAL  PROVISIONS  RESPECTING  BONDS. 

Act  June  3,  311.  Sec.  5167. — The  bonds  transferred  to  and  deposited 
sec^^'  26:  ^^i1^  ^vith  the  Treasurer  of  the  United  States,  by  any  asso- 
btat.  L.,  io7.  ciution,  for  the  security  of  its  circulating  notes,  shall  be 
held  exclusively  for  that  purpose,  until  such  notes  are 
redeemed,  except  as  provided  in  this  title.  The  Comp- 
troller of  the  Currency  shall  give  to  any  such  association 
powers  of  attorney  to  receive  and  appropriate  to  its  own 
use  the  interest  on  the  bonds  which  it  has  so  transferred 
to  the  Treasurer;  but  such  powers  shall  become  inopera- 
tive whenever  such  association  fails  to  redeem  its  circu- 
lating notes.  Whenever  the  market  or  cash  value  of  any 
bonds  thus  deposited  with  the  Treasurer  is  reduced  below 
the  amount  of  the  circulation  issued  for  the  same,  the 
Comptroller  may  demand  and  receive  the  amount  of  such 
depreciation  in  other  United  States  bonds  at  cash  value, 
or  in  money,  from  the  association,  to  be  deposited  with 
the  Treasurer  as  long  as  such  depreciation  continues. 
And  the  Comptroller,  upon  the  terms  prescribed  by  the 
Secretary  of  the  Treasury,  may  permit  an  exchange  to  be 
made  of  any  of  the  bonds  deposited  with  the  Treasurer 
by  any  association,  for  other  bonds  of  the  United  States 
authorized  to  be  received  as  security  for  circulating  notes, 
if  he  is  of  opinion  that  such  an  exchange  can  be  made 
without  prejudice  to  the  United  States;  and  he  may 
direct  the  return  of  any  bonds  to  the  association  which 
transferred  the  same,  in  sums  of  not  less  than  one  thou- 
sand dollars,  upon  the  surrender  to  him  and  the  cancella- 
tion of  a  proportionate  amount  of  such  circulating  notes: 
Provided,  That  the  remaining  bonds  which  shall  have 
been  transferred  by  the  association  offering  to  surrender 
circulating  notes  are  equal  to  the  amount  required  for  the 
circulating  notes  not  surrendered  bj'  such  association,  and 
that  the  amount  of  bonds  in  the  hands  of  the  Treasurer  is 
not  diminished  below  the  amount  required  to  be  kept  on 
deposit  Avith  him,  and  that  there  has  been  no  failure  by 
the  association  to  redeem  its  circulating  notes,  nor  any 
other  violation  by  it  of  the  provisions  of  this  title,  and 


OBTAINING  AND   ISSUING   CIRCULATING   NOTES.  65 

that  the  market  or  cash  value  of  the  remaining  bonds  is 
not  below  the  amount  required  for  the  circulation  issued 
for  the  same. 

Note. — All  provisions  of  law  requiring  national  Danking  asso- 
ciations to  maintain  a  minimum  deposit  of  bonds  were  repealed  by 
the  act  of  June  21,  1917.    See  paragraph  302,  ante. 

WITHDRAWAL  OF  CIRCULATING  NOTES  ON  DEPOSIT  OF 
LAWFUL  MONEY  AND  WITHDRAWAL  OF  BONDS.  ACT 
JUNE  20,  1874. 

312.  Sec.  4. — That  any  association  organized  under  this  ^ct  June  20, 
act,  or  any  of  the  acts  of  "vvhich  this  is  an  amendment,  sec.  4 :  is  stat! 
desiring  to  withdraw  its  circulating  notes,  in  whole  or  in  ^"  ^^^' 
part,  may,  upon  the  dep£>sit  of  lawful  money  with  the 
Treasurer  of  the  United  States  in  sums  of  not  less  than 

nine  thousand  dollars,  take  up  the  bonds  which  said  asso- 
ciation has  on  deposit  with  the  Treasurer  for  the  security 
of  such  circulating  notes;  which  bonds  shall  be  assigned 
to  the  bank  in  the  manner  specified  in  the  nineteenth  sec- 
tion of  the  national-bank  act ;  and  the  outstanding  notes 
of  said  association,  to  an  amount  equal  to  the  legal-tender 
notes  deposited,  shall  be  redeemed  at  the  Treasury  of  the 
United  States,  and  destroyed  as  now  provided  by  law: 
Provided.,  That  the  amount  of  the  bonds  on  deposit  for 
circulation  shall  not  be  reduced  below  fifty  thousand 
dollars. 

Note. — Other  sections  of  this  act  referred  to  under  paragraphs 
401  and  402,  post.     Section  19  of  the  national-bank  act  is  incor- 
porated in  Revised  Statutes,  sections  5162-5164.     See  also  note 
■under  section  5160,   paragraph   304,   ante. 

AMOUNT  OF  BONDS  REQUIRED  TO  BE  ON  DEPOSIT:  RE- 
DUCTION OF  A3I0UNT  OR  RETIREMENT  IN  FULL  OP 
CIRCULATING  NOTES.     ACT  JULY  12,  1882. 

313.  Sec.  8. — That  national  banks  now  organized  {or  Act  July  12. 
herafter  organized) ,  having  a  capital  of  one  hundred  l^p^ .  ^2  g'ta? 
and  fifty  thousand  dollars,  or  less,  shall  not  be  required  l.,  164." 

to  keep  on  deposit  or  deposit  with  the  Treasurer  of  the 
United  States  United  States  bonds  in  excess  of  one- 
fourth  of  their  capital  stock  as  security  for  their  circu- 
lating notes;  but  such  banks  sliall  keep  on  deposit  or 
deposit  with  the  Treasurer  of  the  United  States  the 
amount  of  bonds  as  herein  required.  And  such  of  those 
banks  having  on  deposit  bonds  in  excess  of  that  amount 
are  autliorized  to  reduce  their  circulation  by  the  deposit 
of  lawful  money  as  provided  by  law ;  [provided  That  the 
amount  of  such  circulating  notes  shall  not  in  any  case 
exceed  ninety  per  centum  of  the  par  value  of  the  bonds 
deposited  as  herein  provided:']  Provided  furth^r^  That 
the  national  banks  which  shall  hereafter  make  deposits 
of  lawful  money  for  the  retirement  in  full  of  their  circu- 
lation shall  at  the  time  of  their  deposit  be  assessed  for 
the  cost  of  transporting  and  redeeming  their  notes  then 
outstanding,  a  sum  equal  to  tht;  average  cost  of  the  re- 


56  OBTAINING  AND   ISSUING  CIRCULATING  NOTES. 

demption  of  national-bank  notes  during  the  preceding 
3'ear,  and  shall  thereupon  pay  such  assessment.  And 
all  national  banks  which  have  heretofore  made  or  shall 
hereafter  make  deposits  of  lawful  money  for  the  reduc- 
tion of  their  circulation  shall  be  assessed  and  shall  pay 
an  assessment  in  the  manner  specified  in  section  three  of 
the  act  approved  June  20,  1874,  for  the  cost  of  transport- 
ing and  redeeming  their  notes  redeemed  from  such  de- 
posits subsequently  to  June  30,  1881. 

Note. — The  limitation  of  the  circulation  not  to  exceed  ninety 
per  cent  of  the  bonds  deposited  is  superseded  by  act  March  14, 
1900,  which  follows  Revised  Statutes  5171.  For  act  .Tune  20,  1874, 
section  3,  mentioned  in  this  section,  see  paragraph  414,  post. 

All  provisions  of  law  requiring  national  banking  associations  to 
maintain  a  minimum  deposit  of  bonds  were  repealed  by  the  act  of 
June  21,  1917,  paragraph  302,  ante. 

LIMITATION  ON  WITHDRAWAL  OF  BONDS— CONSENT  OP 
C03IPTR0LLER  OF  CURRENCY  AND  SECRETARY  OF  THE 
TREASURY  NECESSARY. 

1882*  ^c"'^29o'     ^^^-  ^^°-   ^- — That   any  national  banking  association 
Bee.  9 ;  22  Stat  now  Organized,  or  hereafter  organized,  desiring  to  with- 
'Act  Mar.  4,  clraw  its  circulating  notes,  upon   a   deposit   of  lawful 
34*^^  ^tat.'^'  L'^^oney  with  the  Treasurer  of  the  United  States,  as  pro- 
1290.      *      ■'  vided  in  section  four  of  the  act  of  June  twentieth,  eigh- 
teen hundred  and  seventy-four,  or  as  provided  in  this 
act,  is  authorized  to  deposit  lawful  money  and,  with  the 
consent  of  the  Comptroller  of  the   Currency   and  the 
approval  of  the  Secretary  of  the  Treasury,  withdraw  a 
proportionate  amount  of  the  bonds  held  as  security  for 
its  circulating  notes  in  the  order  of  such  deposits:  Pro- 
vided, That  not  more  than  nine  millions  of  dollars  of 
lawful  money  shall  be  deposited  during  any  calendar 
month  for  this  purpose :  A?id  provided  further,  That  the 
provisions  of  this  section  shall  not  apply  to  bonds  called 
for  redemption  by  the  Secretary  of  the  Treasury,  nor  to 
withdrawal  of  circulating  notes  in  consequence  thereof. 

REFUNDING  OF  BONDS  UNDER  THE  FEDERAL  RESERYE 
ACT;  RETIREMENT  OF  CIRCULATING  NOTES. 

lots*'  s^c*^'  1^8^'  ^^^*  ^^^'  ^^" — -^f ter  two  years  from  the  passage  of  this 
38  Stat.'  L.',  act,  and  at  any  time  during  a  period  of  twenty  years 
thereafter,  any  member  bank  desiring  to  retire  the  whole 
or  any  part  of  its  circulating  notes,  may  file  with  the 
Treasurer  of  thf»  United  States  an  application  to  sell  for 
its  account,  at  par  and  accrued  interest.  United  States 
bonds  securing  circulation  to  be  retired. 

PURCHASE  OF  UNITED  STATES  BONDS  BY  FEDERAL 
RESERYE  BANKS. 

j^Act  Dec.  23,  316.  The  Treasurer  shall,  at  the  end  of  each  quarterly 
38  "'st'at.'  L.;  period,  furnish  the  Federal  Reserve  Board  with  a  list  of 
^^^"  such  applications,  and  the  Federal  Reserve  Board  may, 

in  its  discretion,  require  the  Federal  reserve  banks  to  pur- 
chase such  bonds  from  the  banks  whose  applications  have 


OBTAINING   AND  ISSUING   CIRCULATING  NOTES.  57 

been  filed  with  the  Treasurer  at  least  ten  days  before  the 
end  of  any  quarterly  period  at  which  the  Federal  Reserve 
Board  may  direct  the  purchase  to  be  made:  Provided^ 
That  Federal  reserve  banks  shall  not  be  permitted  to  pur- 
chase an  amount  to  exceed  $25,000,000  of  such  bonds  in 
any  one  j^ear,  and  which  amovmt  shall  include  bonds  ac- 
quired under  section  four  of  this  act  by  the  Federal 
reserve  bank. 

Provided  further^  That  the  Federal  Reserve  Board 
shall  allot  to  each  Federal  reserve  bank  such  proportion 
of  such  bonds  as  the  capital  and  surplus  of  such  bank 
shall  bear  to  the  aggregate  capital  and  surplus  of  all  the 
Federal  reserve  banks. 

Upon  notice  from  the  Treasurer  of  the  amount  of  bonds 
so  sold  for  its  account,  each  member  bank  shall  duly 
assign  and  transfer,  in  writing,  such  bonds  to  the  Federal 
reserve  bank  purchasing  the  same,  and  such  Federal  re- 
serve bank  shall,  thereupon,  deposit  lawful  money  with 
the  Treasurer  of  the  United  States  for  the  purchase  price 
of  such  bonds,  and  the  Treasurer  shall  pay  to  the  member 
banks  selling  such  bonds  any  balance  due  after  deducting 
a  sufficient  sum  to  redeem  its  outstanding  notes  secured 
by  such  bonds,  which  notes  shall  be  canceled  and  perma- 
nently retired  when  redeemed. 

ISSUE  OF  CIECULATING  NOTES  TO  FEDEKAL  KESERYE 
BANKS  ON  SECURITY  OF  UNITED  STATES  BONDS; 
CIRCULATING  NOTES  SO  ISSUED  OBLIGATIONS  OF 
FEDERAL  RESERYE  BANK. 

317.  The  Federal  reserve  banks  purchasing  such  bonds  Act  Dec.  23. 
shall  be  permitted  to  take  out  an  amount  of  circulating  3s  'sut.'  L.i 
notes  equal  to  the  par  value  of  such  bonds.  ^69. 

Upon  the  deposit  with  the  Treasurer  of  the  United 
States  of  bonds  so  purchased,  or  any  bonds  with  the  cir- 
culating privilege  acquired  under  section  four  of  this  act, 
any  Federal  reserve  bank  making  such  deposit  in  the 
manner  provided  by  existing  law,  shall  be  entitled  to 
receive  from  the  Comptroller  of  the  Currency  circulating 
notes  in  blank,  registered  and  countersigned  as  provided 
by  law,  equal  in  amoimt  to  the  par  value  of  the  bonds  so 
deposited.  Such  notes  shall  be  the  obligations  of  thp 
Federal  reserve  bank  procuring  the  same,  and  shall  be  in 
form  prescribed  by  the  Secretary  of  the  Treasury,  and  to 
the  same  tenor  and  effect  as  national  bank  notes  now  pro- 
vided by  law.  They  shall  be  issued  and  redeemed  under 
the  same  terms  and  conditions  as  national  bank  notes, 
except  that  tliey  shall  not  be  limited  to  the  amount  of  the 
capital  stock  of  the  Federal  reserve  bank  issuing  them. 

ISSUE  OF  TREASURY  GOLD  NOTES  OF  THE  UNITED 
STATES  IN  EXCHANGE  FOR  CERTAIN  UNITED  STATES 
BONDS. 

318.  Upon  application  of  any  Federal  reserve  bank,  ap-  Act  Dec.  23, 
proved  by  the  Federal  Reserve  Board,  the  Secretary  ofsl^^suT  ^l.! 
the  Treasury  may  issue,  in  exchange  for  United  States  ^69. 


58  OBTAINING  AND   ISSUING  CIRCULATING  NOTES. 

two  per  centum  gold  bonds  bearing  the  circulation  privi- 
lege, but  against  which  no  circulation  is  outstanding,  one- 
year  gold  notes  of  the  United  States  without  the  circula- 
tion privilege,  to  an  amount  not  to  exceed  one-half  of 
the  two  per  centum  bonds  so  tendered  for  exchange,  and 
thirty-year  three  per  centum  gold  bonds  without  the  cir- 
culation privilege  for  the  remainder  of  the  two  per  cen- 
tum bonds  so  tendered :  Provided,  That  at  the  time  of 
such  exchange  the  Federal  reserve  bank  obtaining  such 
one-year  gold  notes  shall  enter  into  an  obligation  with 
the  Secretary  of  the  Treasury  binding  itself  to  purchase 
from  the  United  States  for  gold  at  the  maturity  of  such 
one-year  notes,  an  amount  equal  to  those  delivered  in  ex- 
change for  such  bonds,  if  so  requested  by  the  Secretary, 
and  at  each  maturity  of  one-year  notes  so  purchased  by 
such  Federal  reserve  bank,  to  purchase  from  the  United 
States  such  an  amount  of  one-year  notes  as  the  Secretary 
may  tender  to  such  bank,  not  to  exceed  the  amount  issued 
to  such  bank  in  the  first  instance,  in  exchange  for  the 
two  per  centum  United  States  gold  bonds;  said  obliga- 
tion to  purchase  at  maturity  such  notes  shall  continue 
in  force  for  a  period  not  to  exceed  thirty  years. 

For  the  purpose  of  making  the  exchange  herein  pro- 
vided for,  the  Secretary  of  the  Treasury  is  authorized 
to  issue  at  par  Treasury  notes  in  coupon  or  registered 
form  as  he  may  prescribe  in  denominations  of  one  hun- 
dred dollars,  or  any  multiple  thereof,  bearing  interest 
at  the  rate  of  three  per  centum  per  annum,  payable 
quartcrh',  such  Treasury  notes  to  be  payable  not  more 
than  one  year  from  the  date  of  their  issue  in  gold  coin  of 
the  present  standard  value,  and  to  be  exempt  as  to  prin- 
cipal and  interest  from  the  payment  of  all  taxes  and 
duties  of  the  United  States  except  as  provided  by  this 
act,  as  well  as  from  taxes  in  any  form  by  or  under  State, 
municipal,  or  local  authorities.  And  for  the  same  pur- 
pose, the  Secretary  is  authorized  and  empowered  to  issue 
United  States  gold  bonds  at  par,  bearing  three  per  centum 
interest  payable  thirty  years  from  date  of  issue,  such 
bonds  to  be  of  the  same  general  tenor  and  effect  and  to  be 
issued  under  the  same  general  terms  and  conditions  as 
the  United  States  three  per  centum  bonds  without  the 
circulation  privilege  now  issued  and  outstanding. 

Upon  application  of  any  Federal  reserve  bank,  ap- 
proved by  the  Federal  Reserve  Board,  the  Secretary  may 
issue  at  par  such  three  per  centum  bonds  in  exchange  for 
the  one-year  gold  notes  herein  provided  for. 

Act   Tune  .3  COMPTROLLER    TO    DETERMINE    IF    ASSOCIATION    CAN 

1864,  c.   iog!    commence  business. 

eec.       17  ;       13 

Biat.  L.,  104.  gj^g  g^^  5168. — Whenever  a  certificate  is  transmitted 
to  the  Comptroller  of  the  Currency,  as  provided  in  this 
title,  and  the  association  transmitting  the  same  notifies 
the  Comptroller  that  at  least  fifty  per  centum  of  its  capi- 


OBTAINING   AND   ISSUING    CIRCULATING   NOTES.  59 

tal  stock  has  been  duly  paid  in,  and  that  siu-h  association 
has  complied  with  all  the  provisions  of  this  title  required 
to  be  complied  with  before  an  association  shall  be  author- 
ized to  commence  the  business  of  banking,  the  Comp- 
troller shall  examine  into  the  condition  of  such  associa- 
tion, ascertain  especially  the  amount  of  money  paid  in  on 
account  of  its  capital,  the  name  and  place  of  residence  of 
each  of  its  directors,  and  the  amount  of  the  capital  stock 
of  which  each  is  the  owner  in  good  faith,  and  generally 
whether  such  association  has  complied  with  all  the  pro- 
visions of  this  title  required  to  entitle  it  to  engage  in 
the  business  of  banking;  and  shall  cause  to  be  made  and 
attested  by  the  oaths  of  a  majority  of  the  directors,  and 
by  the  president  or  cashier  of  the  association,  a  statement 
of  all  the  facts  necessary  to  enable  the  Comptroller  to 
determine  whether  the  association  is  lawfully  entitled  to 
commence  the  business  of  banking. 

CERTIFICATE   OF   AUTHORITY   TO   COMMENCE   BANKING 
TO  BE  ISSUED. 

320.  Sec.  5169.— If,  upon  a  careful  examination  of  the    Act  June  3. 
facts  so  reported,  and  of  any  other  facts  which  may  come s^^cls^'io^iy  1*^1^^ 
to  the  knowledge  of  the  Comptroller,  whether  by  means  of  ^tat.   l.,   102, 
a  special  commisison  appointed  by  him  for  the  purpose  of 
inquiring  into  the  condition  of  such  association,  or  other- 
wise, it  appears  that  such  association  is  lawfully  entitled 

to  commence  the  business  of  banking,  the  Comptroller 
shall  give  to  such  association  a  certificate,  under  his  hand 
and  official  seal,  that  such  association  has  comi^lied  with 
all  the  provisions  required  to  be  complied  with  before 
commencing  the  business  of  banking,  and  that  such  asso- 
ciation is  authorized  to  commence  such  business.  But  the 
Comptroller  may  withhold  from  an  association  his  cer- 
tificate authorizing  the  commencement  of  business,  when- 
ever he  has  reason  to  suppose  that  the  shareholders  have 
formed  the  same  for  any  other  than  the  legitimate  ob- 
jects contemplated  by  this  title. 

PUBLICATION  OF  CERTIFICATE. 

321.  Sec.  5170. — The  association  shall  cause  the  certifi-    Act  Jnno  .3, 
cate  issued  under  the  preceding  section  to  be  published  ingf^^^'  i%.  '"/^j 
some  ncAvspaper  printed  in  the  city  or  county  where  thestat.  l.,  104. 
association  is  located,  for  at  least  sixty  days  next  after 

the  issuing  thereof;  or,  if  no  newspaper  is  published  in 
such  city  or  county,  then  in  the  newspaper  published 
nearest  thereto. 

322.  Sec.  5171.— 

This  section  was  originally  section  21  of  the  act  of  .Tune  3,  1804.  • 

It  was  amended  by  the  act  of  Marcli  3.  ISl!;").  and  was  later  in- 
corporated in  the  Revised  Statutes  as  section  5171.    This  section 


GU  OBTAINING  AND   ISSUING  CIRCULATING  NOTES. 

was  repealed  by  the  act  of  July  12,  1882,  and  the  repealing  section 
was  superseded  by  section  12  of  the  act  of  March  14,  1900,  which 
follows : 

DELIVERY  OF  CIRCULATING  NOTES.     ACT  OF  MARCH  14, 
1900.     AS  AMENDED  OCTOBER  5,  1917. 

Act  Mar.  14,  323.  Scc.  12. — That  upon  the  deposit  with  the  Treasurer 
i^^^sf 'stat.^i!!',  o^  ^^^®  United  States,  by  any  national  banlving  association, 
1^:  act  Oct.  5,' of  any  bonds  of  the  United  States  in  the  manner  provided 
be  existing  hxw,  such  association  shall  be  entitled  to  re- 
ceive from  the  Comptroller  of  the  Currency  circulating 
notes  in  blank,  registered  and  countersigned  as  provided 
by  law,  equal  in  amount  to  the  par  value  of  the  bonds  so 
deposited;  and  any  national  banking  associations  now 
having  bonds  on  deposit  for  the  security  of  circulating 
notes,  and  upon  Avhich  an  amount  of  circulating  notes  has 
been  issued  less  than  the  par  value  of  the  bonds,  shall  be 
entitled,  upon  due  application  to  the  Comptroller  of  the 
Currency,  to  receive  additional  circulating  notes  in  blank 
to  an  amount  which  will  increase  the  circulating  notes 
held  by  such  association  to  the  par  value  of  the  bonds 
deposited,  such  additional  notes  to  be  held  and  treated 
in  the  same  way  as  circulating  notes  of  national  banking 
associations  heretofore  issued,  and  subject  to  all  the  pro- 
visions of  law  affecting  such  notes:  Provided^  That 
nothing  herein  contained  shall  be  construed  to  modify  or 
repeal  the  provision  of  section  fifty-one  hundred  and 
sixty-seven  of  the  Revised  Statutes  of  the  United  States, 
authorizing  the  Comptroller  of  the  Carrency  to  require 
additional  deposits  of  bonds  or  of  lawful  money  in  case 
the  market  value  of  the  bonds  held  to  secure  the  circulat- 
ing notes  shall  fall  below  the  par  value  of  the  circulat- 
ing notes  outstanding  for  which  such  bonds  may  be  de- 
posited as  security :  And  provided  furthei\  That  the  cir- 
culating notes  furnished  to  national  banking  associations 
under  the  provisions  of  this  act  shall  be  of  the  denomina- 
tions prescribed  by  law :  And  provided  further^  That  the 
total  amount  of  such  notes  issued  to  any  such  associa- 
tion may  equal  at  any  time  but  shall  not  exceed  the 
amount  at  such  time  of  its  capital  stock  actually  paid  in : 
And  provided  further^  That  under  regulations  to  be 
prescribed  by  the  Secretary  of  the  Treasury  any  national 
banking  association  may  substitute  the  two  per  centum 
bonds  issued  under  the  provisions  of  this  act  for  any  of 
the  bonds  deposited  with  the  Treasurer  to  secure  circula- 
tion or  to  secure  deposits  of  public  money ;  and  so  much 
of  an  act  entitled  "  An  act  to  enable  national  banking 
associations  to  extend  their  corporate  existence,  and 
for  other  purposes,"  approved  July  twelfth,  eighteen 
hundred  and  eighty-tw^o,  as  prohibits  any  national  bank 
which  makes  any  deposit  of  lawful  money  in  order  to 
withdraw  its  circulating  notes  from  receiving  any  in- 
crease of  its  circulation  for  the  period  of  six  months 
from  the  time  it  made  such  deposit  of  lawful  money  for 


OBTAINING  AND  ISSUING  CTKCULATING  NOTES.  61 

the  purpose  aforesaid,  is  hereby  repealed,  and  all  other 
acts  or  parts  of  acts  inconsistent  with  the  provisions  of 
this  section  are  hereby  repealed. 

PRINTING  DENOMINATIONS  AND  FORM  OF  THE  CIRCU- 
LATING NOTES. 

324.  Sec.  5172. — That  in  order  to  furnish  suitable  notes  Act  June  3, 
for  circulation,  the  Comptroller  of  the  Currency  shall,  sec.  '  22;  ^  li 
under  the  direction  of  the  Secretary  of  the  Treasury,  ^*A*ct^Mir^.^'3, 
cause  plates  and  dies  to  be  enaraved,  in  the  best  manner  i^i^- 

to  guard  against  counterfeiting  and  fraudulent  altera- 
tions, and  shall  have  printed  therefrom  and  numbered 
such  quantity  of  circulating  notes  in  blank,  or  bearing 
engraved  signatures  of  officers  as  herein  provided,  of  the 
denominations  of  $1,  $2,  $5,  $10,  $20,  $50,  $100,  $500,  and 
$1,000,  as  may  be  required  to  supply  the  associations  en- 
titled to  receive  the  same.  Such  notes  shall  express  upon 
their  face  that  they  are  secured  by  United  States  bonds 
deposited  with  the  Treasurer  of  the  United  States,  by  the 
yrritten  or  engraved  signatures  of  the  Treasurer  and  Reg- 
ister, and  by  the  imprint  of  the  seal  of  the  Treasury ;  and 
shall  also  express  upon  their  face  the  promise  of  the  as- 
sociation receiving  the  same  to  pay  on  demand,  attested 
by  the  written  or  engraved  signatures  of  the  president  or 
vice  president  and  cashier;  and  shall  bear  such  devices 
and  such  other  statements  and  shall  be  in  such  form  as  the 
Secretary  of  the  Treasury  shall,  by  regulation,  direct. 

CHARTER    NUMBER    TO    BE    PRINTED    ON    NOTES.     ACT 
JUNE  20,   1874. 

325.  Sec.  5. — That  the  Comptroller  of  the  Currency  Act  June  20, 
shall,  under  such  rules  and  regulations  as  the  Secretary  ISS  -.  is  i& 
of  the  Treasury  may  prescribe,  cause  the  charter  numbers ^^  ^2'*- 

of  the  association  to  be  printed  upon  all  national-bank 
notes  which  may  be  hereafter  issued  by  him. 

Note. — Other  sections  of  this  act  will  be  found  in  note  under 
paragraphs  401  and  402,  post. 

DISTINCTITE  PAPER  FOR  PRINTING  NOTES.    ACT  MARCH 
3,  1875. 

326.  Sec.    1. — *     *     *     That   the  national-bank   notes    Act  Mar.  3, 
shall  be  printed  under  the  direction  of  the  Secretary  of  Lc.^i :  is  itft 
the  Treasury,  and  upon  the  distinctive  or  special  paper  ^rV  lilu'bnr' 
which  has  been,  or  may  hereafter  be,  adopted  by  him  for 
printing  United  States  notes. 

PLATES  AND  DIES  TO  BE  UNDER  THE  CONTROL  OF  THE 

COMPTROLLER.     EXPENSES    OF    CURRENCY    BUREVU 

TO  BE  PAID  OUT  OF  PROCEEDS  OF  TAXES,  OR  DUTIES, 

ASSESSED  AND  COLLECTED  ON  THE  CIRCULATION  OF 

NATIONAL  BANKING  ASSOCIATIONS. 

327.  Sec.  5173. — The  plates  and  special  dies  to  be  pro-  a^"*  •^""% ^,' 
cured  by  the  Comptroller  of  the  Currency  for  ihe  print-  soc  '  4T:  d 
ing  of  such  circulating  notes  shall  remain  under  his  con-  ^^^*-  ^"  ^^^- 


02  OBTAINING  AND  ISSUING   CIKCULATING  NOTES. 

trol  and  direction,  and  the  expenses  necessarily  incurred 
in  executing  the  laws  respecting  the  procuring  of  such 
notes,  and  all  other  expenses  of  the  Bureau  of  the  Cur- 
rency, shall  be  paid  out  of  the  proceeds  of  the  taxes  or 
duties  assessed  and  collected  on  the  circulation  of  national 
banking  associations  under  this  title. 

Note. — See  act  June  20,  1874,  paragraph  414,  post,  and  act  July 
12,  1882,  paragraph  220,  ante,  requiring  banks  to  pay  cost  of  their 
plates.  On  April  30,  1914,  at  the  request  of  the  Comptroller  of  the 
Currency,  the  Secretary  of  the  Treasury  designated  the  Director 
of  Bureau  of  Engraving  and  Printing  as  custodian  of  the  dies, 
rolls,  and  plates,  etc.,  used  for  the  printing  of  circulating  notes  of 
the  Federal  reserve  and  national  banks. 

EXAMINATION  OF  PLATES  AND  DIES. 

.\ct  Mar.  3.  328.  Sec.  5174  [as  amended  1877]. — The  Comptroller  of 
l^c."\ ;  17  s"ta.l'  the  Currency  shall  cause  to  be  examined,  each  year,  the 
''■\ct^^E^eb  27  pl^^es,  dics,  bed  pieces,  and  other  material  from  which  the 
1 STT,  c.  69j  19  national-bank  circulation  is  printed,  in  whole  or  in  part, 
Stat.  L.,  2o2.    ^^^  gj^  ^^  l^^g  office  annually  a  correct  list  of  the  same. 

Such  material  as  shall  have  been  used  in  the  printing  of 
the  notes  of  associations  which  are  in  liquidation,  or  have 
closed  business,  shall  be  destroyed,  under  such  regulations 
as  shall  be  prescribed  by  the  Comptroller  of  the  Currency 
and  approved  by  the  Secretary  of  the  Treasury.  The  ex- 
penses of  any  such  examination  or  destruction  shall  be 
paid  out  of  any  appropriation  made  b}^  Congress  for  the 
special  examination  of  national  banks  and  bank-note 
plates. 

LIMIT  TO  ISSUE  OF  NOTES  UNDER  FIVE  DOLLARS. 

.Act  Oct.  5,  329.  Sec.  3.  That  from  and  after  the  passage  of  this 
'*^^^*  Act  any  national  banking  association,  upon  compliance 

with  the  provisions  of  law  applicable  thereto,  shall  be  en- 
titled to  receive  from  the  Comptroller  of  the  Currency, 
or  to  issue  or  reissue,  or  place  in  circulation  notes  in 
denominations  of  $1,  $2,  $.5,  $10,  $20,  $50,  and  $100  in 
such  proportion  as  to  each  of  said  denominations  as  the 
bank  may  elect:  Provided^  however^  That  no  bank  shall 
receive  or  have  in  circulation  at  any  one  time  more  than 
$25,000  in  notes  of  the  denominations  of  $1  and  $2. 

Note.— Section  5175,  Revised  Statutes,  providing  that  not  more 
than  one-sixth  part  of  the  notes  furnished  to  any  association 
should  be  of  a  less  denomination  than  .$5  was  repealed  by  section 
2  of  the  act  of  October  5,  1917.  Section  5172,  Revised  Statutes, 
as  amended  March  3.  1919,  authorizes  the  issuance  of  notes  of  the 
denomination  of  $500  and  $1,000. 

330.  Sec.  5176.— 

Repealed  by  act  July  12,  1882,  which  in  turn  was  superseded  by 
act  March  14,  1900.      (See  section  5171.) 

331.  Sec.  5177.— 

Repealed  by  act  .lanuary  14,  1875. 


OBTAINING  AND  ISSUING  CIRCULATING  NOTES.  63 

AGGREGATE  AMOUNT  OF  CIRCULATING  NOTES  NOT  LIM- 
ITED.   ACT  JANUARY  14,  1875. 

332.  Sec.  3.— That  section  5177  of  the  Revised  Statutes, ^Act^jan.^H. 
of  the  United  States,  limiting  the  aggregate  amount  of ;;:  ^8  stat.  L.i 
circulating  notes  of  national  banking  associations,  be  and  " 

is  hereby,  repealed ;  and  each  existing  banking  association 
may  increase  its  circulating  notes  in  accordance  with  ex- 
existing  law  without  respect  to  said  aggregate  limit;  and 
new  banking  associations  may  be  organized  in  accord- 
ance with  existing  law  without  respect  to  said  aggregate 
limit;  and  the  provisions  of  law  for  the  withdrawal  and 
redistribution  of  national  bank  currency  among  the  sev- 
eral States  and  Territories  are  hereby  repealed. 

333.  Sec.  5178.— 

Repealed  by  act  January  14,  1875. 

334.  Sec.  5179.— 

Repealed  by  act  January  14,  1875. 

335.  Sec.  5180.— 

Repealed  by  act  January  14,  1875. 

336.  Sec.  5181.— 

Repealed  by  act  January  14,  1875. 

FOR  WHAT  DEMANDS  NATIONAL-BANK  NOTES  MAY  BE 
RECEIYED. 

337.  Sec.  5182  [as  amended  1919].— Any  association  re- ^g^^f ^   -^^^    ^^^ 
ceiving  circulating  notes  under  this  title  may,  if  its  prom- 
ise to  pay  such  notes  on  demand  is  expressed  thereon  at- 
tested by  the  written  or  engraved  signatures  of  the  presi- 
dent or  vice  president  and  the  cashier  thereof  in  such 

manner  as  to  make  them  obligatory  promissory  notes  pay- 
able on  demand  at  its  place  of  business,  issue,  and  circu- 
late the  same  as  money.  Such  written  or  engraved  signa- 
tures of  the  president  or  vice  president  and  the  cashier  of 
such  association  may  be  attached  to  such  notes  either  be- 
fore or  after  the  receipt  of  such  notes  by  such  association. 
And  such  notes  shall  be  received  at  par  in  all  parts  of  the 
United  States  in  payment  of  taxes,  excises,  public  lands, 
and  all  other  dues  to  the  United  States,  except  duties  on 
imports ;  and  also  for  all  salaries  and  other  debts  and  de- 
mands owing  by  the  United  States  to  individuals,  cor- 
porations, and  associations  within  the  United  States,  ex- 
cept interest  on  the  public  debt,  and  in  redemption  of  the 
national  currency. 

ISSUE  OF  POST  NOTES,  ETC.,  PROHIBITED. 

338.  Sec.  5183  [as  amended  1875].— No  national  banking  jswf  J'^'no.! 
association  shall  issue  post  notes  or  any  other  notes  to|<|^^j  j-^j,,,.^-^ 
circulate  as  monev  than  such  as  are  authorized  by  the  Act  'fcu.  'is 
provisions  of  this" Title.  y^^;  /;;;T:ji./*' 


64  OBTAINING  AND  ISSUING  CIRCULATING  NOTES. 

DESTROYING   AND   REPLACING   WORN-OUT   AND    MUTI- 
LATED NOTES. 

ififtf*  *^"°®i  J'     339.  Sec.  5184.— It  shall  be  the  duty  of  the  Comptroller 

1864,     c.     106.     J.    ,,         ^  ,  •  •',  .-1    i     1       • 

sec.  24;  13  01  the  Currency  to  receive  worn-out  or  mutilated  cir- 
stat.  L.,  106.  cuiating  notes  issued  by  any  banking  association,  and 
also,  on  due  proof  of  the  destruction  of  any  such  circulat- 
ing notes,  to  deliver  in  place  thereof  to  the  association 
other  blank  circulating  notes  to  an  equal  amount.  Such 
"worn-out  or  mutilated  notes,  after  a  memorandum  has 
been  entered  in  the  proper  books,  in  accordance  with  such 
regulations  as  may  be  established  by  the  Comptroller,  as 
well  as  all  circulating  notes  which  shall  have  been  paid  or 
surrendered  to  be  canceled  [^shall  he  humed  to  ashes']  in 
presence  of  four  persons,  one  to  be  appointed  by  the  Sec- 
retary of  the  Treasury,  one  by  the  Comptroller  of  the 
Currency,  one  by  the  Treasurer  of  the  United  States,  and 
one  by  the  association,  under  such  regulations  as  the  Sec- 
retary of  the  Treasury  may  prescribe.  A  certificate  of 
l^such  burning']  signed  by  the  parties  so  appointed,  shall 
be  made  in  the  books  of  the  Comptroller,  and  a  duplicate 
thei-eof  forwarded  to  the  association  whose  notes  are  thus 
canceled. 

Note.— Act  June  23,  1874,  provides  for  maceration  in  place  of 
burning. 

MACERATION    OF    NATIONAL-BANK   NOTES.     ACT    JUNE 
23,  1874. 

sund?^d'vu a**^     ^^^'  *     *     *     For   the   maceration   of  national   bank 
propriation  act  notes     *     *     *     •  an(j  that  all  such  issues  hereafter  de- 
c."  455",^sec^^i ;  stroyed  may  be  destroyed  by  maceration  instead  of  burn- 
18 Stat. L , 206.    j^g  to  ashcs,  as  now  provided  by  law;  and  that  so  much 
of  sections  twenty-four  and  forty-three  of  the  national 
currency  act  as  requires  national  bank  notes  to  be  burned 
to  ashes  is  hereby  repealed ;  that  the  pulp  from  such  mac- 
erated issue  shall  be  disposed  of  only  under  the  direction 
of  the  Secretary  of  the  Treasury. 

ORGANIZATION     OF    ASSOCIATIONS     TO     ISSUE     GOLD 
NOTES. 

1870*  '^c"'''282:     341.  Sec.  5185  [as  amended  1875].— Associations  may  be 

sec.^^ ;  16  Stat!  organized  in  the  manner  prescribed  by  this  Title  for  the 

"A-ct  Jan.  19,  purpose  of  issuing  notes  payable  in  gold ;  and  upon  the 

18^^'stat.   ■^L !  deposit  of  any  United  States  bonds  bearing  interest  pay- 

302.  able  in  gold  with  the  Treasurer  of  the  United  States,  in 

the  manner  prescribed  for  other  associations,  it  shall  be 

lawful  for  the  Comptroller  of  the  Currency  to  issue  to 

the  association  making  the  deposit  circulating  notes  of 

different   denominations,   but    none   of   thein    less   than 

five  dollars,  and   not  exceeding  in  amount  eighty  per 

centum  of  the  par  value  of  the  bonds  deposited,  which 

shall  express  the  promise  of  the  association  to  pay  them, 

upon  presentation  at  the  ofTicc  at  which  they  arc  issued,  in 

gold  coin  of  the  United  States,  and  shall  be  so  redeemable. 


OBTAINING  AND  ISSUING  CIRCULATING  NOTES.  65 

[But  no  such  association  shall  have  a  circulation  of  more 
than  one  million  of  dollars.) 

Note. — The  limitation  of  circulation  of  banking  associations  is- 
suing notes  payable  in  gold  was  repealed  by  the  act  of  January 
19,  1875. 

RESERYE  REQUIREMENTS  FOR  GOLD  BANKS. 

342.  Sec.  5186. — Every  a&sociation  organized  under  the^g^^*  "^c"'^282' 
preceding  section  shall  at  all  times  keep  on  hand  not  less  sees.'  3-5;  le 
than  twenty-five  per  centum  of  its  outstanding  circula- 253!'  ^"  ^^^' 
tion,  in  gold  or  silver  coin  of  the  United  States;  and  shall 

receive  at  par  in  the  payment  of  debts  the  gold  notes  of 
every  other  such  association  which  at  the  time  of  such 
payment  is  redeeming  its  circulating  notes  in  gold  coin 
of  the  United  States,  and  shall  be  subject  to  all  the  pro- 
visions of  this  Title:  Provided.,  That,  in  applying  the 
same  to  associations  organized  for  issuing  gold  notes,  the 
terms  "  lawful  money  "  and  "  lawful  money  of  the  United 
States  "  shall  be  construed  to  mean  gold  or  silver  coin  of 
the  United  States ;  and  the  circulation  of  such  association 
shall  not  be  wathin  the  limitation  of  circulation  men- 
tioned in  this  Title. 

CONVERSION  OF  NATIONAL  GOLD  BANKS  INTO  CUR- 
RENCY BANKS.  ACT  FEBRUARY  14,  1880. 

343.  That  any  national  gold  bank  organized  under  the    Act  Feb.  14. 
provisions  of  the  laws  of  the  United  States,  may,  in  the  yf|^'  ^  -^^  ^^ 
manner  and  subject  to  the  provisions  prescribed  by  sec- 
tion fifty-one  hundred  and  fifty-four  of  the  Eevised  Stat- 
utes of  the  United  States,  for  the  conversion  of  banks  in- 
corporated under  the  laws  of  any  State,  c^ase  to  be  a  gold 

bank,  and  become  such  an  association  as  is  authorized  by 
section  fifty-one  hundred  and  thirty-three,  for  carrying 
on  the  business  of  banking,  and  shall  have  the  same  powd- 
ers and  privileges,  and  shall  be  subject  to  the  same  duties, 
responsibilities,  and  rules,  in  all  respects,  as  are  bj'  law 
prescribed  for  such  associations:  Provided.^  That  all 
certificates  of  organization  which  shall  be  issued  under 
this  act  shall  bear  the  date  of  the  original  organization  of 
each  bank  respectively  as  a  gold  bank. 

PENALTY  FOR  ISSUING  CIRCULATING  NOTES  TO  UNAU- 
THORIZED  ASSOCIATIONS. 

344.  Sec.  5187. — No  officer  acting  under  the  provisions    Act  June  3, 
of  this  title  shall  countersign  or  deliver  to  any  associa-  g^^^'    27 ;  ^^\i 
tion,  or  to  any  other  company  or  person,  any  circulating  ^'at-  l.,  107. 
notes  contemplated  by  this  title,  except  in  accordance 

with  the  true  intent  and  meaning  of  its  provisions. 
Every  officer  who  violates  this  section  shall  be  deemed 
guilty  of  a  high  misdemeanor,  and  shall  be  fined  not  more 
than  double  the  amount  so  countersigned  and  delivered, 
and  imprisoned  not  less  than  one  year  and  not  more  than 
fifteen  years. 

164312°— 20 5 


66  OBTAINING  AND   ISSUING   CIRCULATING   NOTES. 

PENALTY  FOR  IMITATING  BANK  CIRCULATION.     USE  OF 
SAME  FOR  ADYERTISING  PURPOSES. 

Act  Mar    4,     345,  Sec.  5188. — Superseded  by  section  175  of  the  act 

1909,     c.     321,     <;    Tvr        1       ,      -1  ann 

sec.    175 ;    35  01   March   4,   1909. 

^^his^'sectfon      SECTION  175.  It  shall  not  be  lawful  to  design,  engrave, 

originally     en  ])rint,  OF  in  any  manner  make  or  execute,  or  to  utter, 

acted     Feb.     o,  f  Tj.-ii.-ij.  u- 

1867.  issue,  distribute,  circulate,  or  use  any  business  or  pro- 

fessional card,  notice,  placard,  circular,  hand-bill,  or  ad- 
vertisement in  the  likeness  or  similitude  of  any  circulat- 
ing note  or  other  obligation  or  security  of  any  banking 
association  organized  or  acting  under  the  laws  of  the 
United  States  which  has  been  or  may  be  issued  under 
any  act  of  Congress,  or  to  write,  print,  or  otherwise 
impress  upon  any  such  note,  obligation,  or  security,  any 
business  or  professional  card,  notice  or  advertisement,  or 
any  notice  or  advertisement  of  any  matter  or  thing  what- 
ever. Whoever  shall  violate  any  provision  of  this  sec- 
tion shall  be  fined  not  more  than  one  hundred  dollars, 
or  imprisoned  not  more  than  six  months,  or  both. 

PENALTY  FOR  MUTILATING  CIRCULATION. 

1909*  ^'""bi"  ^^^-  ^^^-  5189.— Superseded  by  section  176  of  the  act 
Bee.  '  176 ;    3^  of  March  4,  1909. 

^^Tiii^'sectfo^n  Section  176.  Whocver  shall  mutilate,  cut,  deface,  dis- 
Tnacte^d'^' juni ^S^^i'^5  or  perforate  with  holes,  or  unite  or  cement  to- 
3,  1864.  gether,  or  do  any  other  thing  to  any  bank  bill,  draft, 

note,  or  other  evidence  of  debt,  issued  by  any  national 
banking  association,  or  shall  cause  or  procure,  the  same 
to  be  done,  with  intent  to  render  such  bank  oill,  draft, 
note,  or  other  evidence  of  debt  unfit  to  be  reissued  by 
said  association,  shall  be  fined  not  more  than  one  hundred 
dollars,  or  imprisoned  not  more  than  six  months,  or  both. 


REGULATION  OF  THE  BANKING  BUSINESS. 


fi7 


CHAPTER  IV. 


REGULATION   OF  THE   BANKING   BUSINESS. 


400.  5190.  Place  of  business. 

401.  Central   reserve  cities. — Explana- 

tory note. 

402.  Reserve  cities. — Explanatory  note. 

403.  Act   Dec.    23,   1913,    as   amended. 

Demand  and  time  depos- 
its defined. 

404.  Act  Dec.   23,   1913,    as   amended. 

Reserve  requirements — 
when  effective. 

405.  Act  Dec.   23,    1913,   as    amended. 

Reserve  requirements  for 
banks  not  in  reserve  cities. 

406.  Act   Dec.    23,    1913,    as   amended. 

Reserve  requirements  for 
banks  in  reserve  cities. 

407.  Act   Dec.   23,   1913,    as   amended. 

Reserve  requirements  for 
banks  in  central  reserve 
cities. 

408.  Act   Dec.   23,   1913,    as   amended. 

Member  bank  forbidden  to 
keep  on  deposit  with  non- 
member  bank  a  sum  in 
excess  of  10  per  cent  of  its 
own  capital  and  surplus 
or  to  secure  discounts  for 
nonmember  bank. 

409.  Act   Dec.    23,    1913,    as   amended. 

Withdrawal  of  reserve  by 
member  bank. 

410.  Act   Dec.   23,    1913,    as    amended. 

Reserve  requirements — 
how  estimated. 

411.  Act    Dec.    23,   1913,    as   amended. 

Reserve  requirements  for 
national  banks  located  in 
Alaska  or  outside  the  con- 
tinental United  States. 

412.  Act  December  23,  1913.     Redemp- 

tion fund  not  counted  as 
reserve. 

413.  No   reserve   required    to   be   held 

again.st  United  States  do 
posits. 

414.  Act  June  20,  1874.    Provisions  for 

redeeming  circulation. 
Five  per  cent  redemption 
fund. 

415.  Act  March  3,  1875.    Clerical  force 

for  redemption  of  circu- 
lating notes. 

416.  Act  July  14,  1890.     Disposition  of 

redemption  account. 

417.  Act  July  28,  1892.    Redemption  of 

lost  or  stolen  notes  and  of 
notes  not  properly  signed. 


418.  5193.  Repealed  by  act  March  14, 

1900. 

419.  5194.  Superseded  by  repeal  of  sec- 

tion 5193. 

420.  5195.  Place  for  redemption  of  cir- 

culating notes  to  be  desig- 
nated. 

421.  5196.  National  banks  to  take  notes 

of  other  national  banks 
at  par. 

422.  5197.  Limitation  upon  rate  of  in- 

terest which  may  be 
taken. 

423.  5198.  Penalty  for  taking  unlawful 

interest.  Jurisdiction  of 
suits  by  or  against  na- 
tional banks. 

424.  5199.  Dividends. 

425.  5200.  Limitation    of    liabilities 

which  may  be  incurred  by 
any  one  person,  company, 
etc. 

426.  5201.  Associations  must  not  loan 

on  or  purcha.se  their  own 
stock. 


427. 
428. 
429. 


5202. 


5203. 
5204. 


5206. 
5207. 


Restriction    on    bank's    in- 
debtedness. 

Restriction  upon  use  of  cir- 
culating notes. 

Prohibition  upon  w  i  t  h- 
drawal  of  capital.  Un- 
earned  dividends  pro- 
hibited. 
430.  5205.  Assessment  for  failure  to 
pay  up  capital  stock  or  for 
impairment  of  capital. 

Prohibition    against    uncur- 
rent   notes. 

United  States  notes  not  to 
be  held  as  collateral. 
Act  July  12,  1882.     Issue  of  gold 

certificates. 
520S.  Penalty  for  faLsely  certify- 
ing checks. 
Act    July    12,    1882.     Punishment 
for      falsely      certifying 
checks. 

Penalty  for  embezzlement, 
abstraction,  willful  mis- 
application, false  entries, 
etc. 
437.  Act  January  26,  1907.  National 
banks  not  permitted  to 
make  contributions  in  con- 
nection with  election  to 
political  office. 

69 


431 
432, 
433, 
434, 
435. 

430.  5209. 


70 


REGULATION   OF   THE   BANKIXG   BUSINESS. 


438a.  Member  bank  can  not  make  loan 
or  grant  a  gratuity  to  any 
national  bank  examiner. 

438b.  National  bank  examiner  can  not 
perform  any  services  for 
compensation  for  any 
bank  or  officer.  Exam- 
iner can  not  disclose  the 
names  of  borrowers  or 
collateral  without  first  ob- 
taining written  consent  of 
Comptroller. 

438c.  Penalty  for  officer,  director,  or 
employee  of  member  bank 
who  receives  any  commis- 
sion or  gift  in  connection 
with  any  loan. 

438d.  Purchase  of  securities  or  prop- 
erty from  one  of  its  di- 
rectors, or  sales  to  a  di- 
rector by  a  member  bank. 

438e.  Rate  of  interest  paid  directors, 
officers,  or  employees  not 
to  exceed  that  paid  to 
other  depositors. 

PLACE  OF  BUSINESS. 


438f.  Penalty  for  violation  of  any  of 
the  provisions  of  section 
22  of  the  Federal  reserve 
act. 

439.  .5210.  List  of  shareholders. 

440.  5211.  Reports   to   Comptroller   of 

Currency. 

441.  Act  February  26,  ISSl.     Verifica- 

tion of  reports. 

442.  5212.  Report  of  dividends. 

443.  5213.  Penalty  for  failure  to  make 

reports. 
444.^45.  5214  and  act  March  14.  1900. 
Taxes  on  circulation  pay- 
able to  the  United  States. 

446.  5215.  Half-yearly  return  of  circu- 

lation. 

447.  5216.  Penalty  for  failure  to  make 

return. 

448.  5217.  Enforcing    tax    on    circula- 

tion. 

449.  5218.  Refunding  excess  tax. 

450.  Act  March  1.  1879.     No  tax  to  be 

paid  by  insolvent  banks. 

451.  5219.  State  taxation. 


400.  Sec.  5190. — The  usual  business  of  each 

1864*  c"°%6'^^^^^^^  association  shall  be  transacted  at  an 

sec.  8 ;  13  Stat!  banking  house  located  in  the  place  specified  in  its  organi 

L.,  101.  zation  certificate. 


national 
office 


or 


Note. — See  act  May  1,  1886,  paragraph  211,  ante,  in  reference 
to  change  in  place  of  business.  For  authority  of  national  bank  to 
establish  branches  in  foreign  countries  or  dependencies  of  the 
United  States,  see  section  25,  Federal  reserve  act. 

CENTRAL  EESERYE  CITIES— EXPLANATORY  NOTE. 


401.  [Each  association  organized  in  any  of  the  cities 
^ojg^P^^"**'^'"^  named  in  section  5191.  United  States  Revised  Statutes, 
was  authorized  by  section  5195,  United  States  Revised 
Statutes,  to  select,  sub]ect  to  the  approval  of  the  Comp- 
troller of  the  Currency,  an  association  in  the  citv  of 
NeAv  York  where  it  might  keep  one-half  of  its  lawful 
money  reserve.  This  section  originally  provided  for  the 
redemption  of  circuhiting  notes  at  such  selected  bank  in 
that  city,  but  all  provisions  other  than  that  authorizing 
the  keeping  of  a  portion  of  the  reserve  with  such  bank 
were  repealed  by  the  act  of  June  20,  1874.  Since  the 
passage  of  the  act  of  June  21,  1917,  however,  a  member 
bank  can  not  count  any  l)alances  as  reserve  except  those 
due  from  the  Federal  reserve  bank  of  its  district. 

Under  the  provisions  of  section  2  of  the  act  of  March 
3,  1887,  whenever  three-fourths  in  number  of  the  na- 
tional banks  located  in  any  city  of  the  United  States  hav- 
ing a  population  of  200,000  shall  have  made  application 
to  the  Comptroller  of  the  Currency,  asking  that  such 


REGULATION   OF   THE  BANKING   BUSINESS.  71 

city  bo  made  a  central  reserve  city,  like  the  city  of  New 
York,  the  Comptroller  of  the  Currency,  with  the  ap- 
proval of  the  Secretary  of  the  Treasury,  was  authorized 
to  grant  such  request,  and  under  the  provisions  of  this 
section  the  cities  of  St.  Louis  and  Chicago  were  desig- 
nated as  additional  central  reserve  cities  on  March  18 
and  .May  2,  1887,  respectively. 

The  Federal  reserve  act  confers  authority  upon  the 
Federal  Reserve  Board  to  add  to  the  number  of  cities 
classified  as  central  reserve  cities,  to  reclassify  existing 
reserve  and  central  reserve  cities,  or  to  terminate  their 
designation  as  such.  (See  section  11,  paragraph  E, 
Federal  reserve  act.)] 

Note. — Section  5195  and  section  2  of  the  act  of  March  3,  1887, 
heretofore  referred  to,  are  as  follows : 

"  Sec.  5195.  Each  association  organized  in  any  of  the  cities 
named  In  section  fifty-one  hundred  and  ninety-one  shall  select, 
subject  to  the  approval  of  the  Comptroller  of  the  Currency,  an 
association  in  the  city  of  New  York,  at  which  it  will  redeem  its 
circulating  notes  at  par,  and  may  keep  one-half  of  Its  lawful 
money  reserve  in  cash  deposits  in  the  city  of  New  York.  But  the 
foregoing  provision  shall  not  apply  to  associations  organized  and 
located  in  the  city  of  San  Francisco  for  the  purpose  of  issuing 
notes  payable  in  gold.  Each  association  not  organized  within  the 
cities  named  shall  select,  subject  to  the  approval  of  the  Comp- 
troller, an  association  in  either  of  the  cities'  named,  at  which  it 
will  redeem  its  circulating  notes  at  par.  The  Comptroller  shall 
give  public  notice  of  the  names  of  the  associations  selected,  at 
which  I'edemptions  are  to  be  made  by  the  respective  associations, 
and  of  any  change  that  may  be  made  of  the  association  at  which 
the  notes  of  any  association  are  redeemed.  Whenever  any  asso- 
ciation fails  either  to  make  the  selection  or  to  redeem  its  notes 
as  aforesaid,  the  Comptroller  of  the  Currency  may,  upon  receiving 
satisfactory  evidence  thereof,  appoint  a  receiver.  In  the  manner 
provided  for  in  section  fifty-two  hundred  and  thirty-four,  to  wind 
up  its  affairs.  But  this  section  shall  not  relieve  any  association 
from  its  liability  to  redeem  its  circulating  notes  at  its  own  counter, 
at  par,  in  lawful  money  on  demand." 

Section  3  of  the  act  of  June  20,  1874,  amending  section  5195, 
Revised  Statutes,  provides — 

"That  so  much  of  section  thirty-two  (section  5195,  Revised 
Statutes)  of  said  national-bank  act  requiring  or  permitting  the 
redemption  of  its  circulating  notes  elsewhere  than  at  its  own 
counter,  except  as  provided  for  in  this  section,  is  hereby  repealed," 

Section  2,  act  of  March  3,  18S7,  provides : 

"  That  whenever  three-fourths  in  number  of  the  national  banks 
located  in  any  city  of  the  United  States  having  a  population  of 
two  hundred  thousand  people  shall  make  application  to'  the  Comp- 
troller of  the  Currency,  in  writing,  asking  that  such  city  may  be  a 
central  reserve  city,  like  the  city  of  New  York,  in  which  one-half 
of  the  lawful-money  reserve  of  the  national  banks  located  in  other 
reserve  cities  may  be  deposited,  as  provided  in  section  fifty-one 
hundred  and  ninety-five  of  the  lievised  Statutes,  the  Comptroller 
shall  have  authority,  with  the  approval  of  the  Secretary  of  the 
Treasury,  to  grant  such  request,  and  every  bank  located  in  such 
city  shall  at  all  times  thereafter  have  on  hand,  in  lawful  money 
of  the  United  States,  twenty-five  per  centum  of  its  deposits,  as 
provided  in  section  fifty-one  hundred  and  ninety-one  of  the 
Revised  Statutes." 


72  REGULATION   OF  THE   EANKIISTG  BUSINESS. 

RESERTE  CITIES— EXPLANATORY  NOTE. 

^^Explanatory  402.  [Section  5191,  United  States  Revised  Statutes, 
names  certain  cities  in  which  national  banks  located 
therein  were  required  to  have  on  hand  in  lawful  money 
an  amount  equal  to  at  least  twenty-five  per  cent  of  the 
aggregate  amount  of  their  deposits,  and  provided  that 
every  other  association  should  have  on  hand  in  lawful 
money  an  amount  equal  to  fifteen  per  cent  of  the  aggre- 
gate amount  of  its  deposits.  Section  5191  further  provided 
that  the  Comj)troller  of  the  Currency,  with  the  concur- 
rence of  the  Secretary  of  the  Treasury,  might  appoint  a 
receiver  for  any  association  for  failure  to  make  good  any 
deficiency  in  its  reserve  within  thirty  days  after  the  date 
when  the  Comptroller  of  the  Currency  has  notified  the 
association  to  make  good  the  deficiency.  Section  5192, 
United  States  Revised  Statutes,  provided  that  three- 
fifths  of  the  reserve  of  fifteen  per  cent  required  to  be  kept 
by  country  banks  might  consist  of  balances  due  to  such 
associations  from  associations  approved  by  the  Comp- 
troller of  the  Currency  in  one  of  the  reserve  cities  men- 
tioned in  said  section.  Sinc«  the  passage  of  the  act  of 
June  21, 1917,  however,  a  member  bank  can  not  count  any 
balances  as  reserve  except  those  due  from  the  Federal 
Reserve  Bank  of  its  district. 

The  following  are  the  reserve  cities  designated  in  sec- 
tions 5191  and  5192 : 

Albany,  Baltimore,  Boston,  Cincinnati,  Chicago,  Cleve- 
land, Detroit,  Louisville,  Milwaukee,  New  Orleans,  New 
York,  Philadelphia,  Pittsburgh,  St.  Louis,  San  Fran- 
cisco, and  Washington. 

In  addition  to  the  cities  listed  in  the  preceding  para- 
graph, the  city  of  Leavenworth,  Kansas,  was  named  in 
sections  5191  and  5192,  but  this  designation  was  repealed 
by  special  act  of  date  March  1,  1872.  The  cities  of 
Charleston  and  Richmond  were  also  named  as  reserve 
cities  in  section  5192,  but  were  not  included  in  the  list  of 
reserve  cities  enumerated  in  section  5191.  The  Comp- 
troller of  the  Currency,  therefore,  did  not  approve  any 
banks  in  those  cities  as  reserve  agents.  On  April  27, 
1914,  however,  three-fourths  of  the  banks  in  Richmond 
having  requested  that  that  city  be  designated  as  a  reserve 
city,  it  was  so  designated  under  authority  of  the  act  of 
March  3,  1887. 

TheCom]itroller  of  the  Currency  was  authorized  under 
the  act  of  IVfarch  3,  1887,  to  designate  additional  reserve 
cities  whenever  three-fourths  in  number  of  national 
banks  located  in  any  city  of  the  United  States  having  a 
population  of  50,000  requested  that  the  city  in  question 
be  so  designated.  Tliis  limit  of  ]iopulation  was  reduced 
to  25,000  by  the  act  of  Miirch  3,  1903. 

The  city  of  New  York  listed  as  a  reserve  city  in  sections 
6191  and  5192  was  designated  as  a  central  reserve  city  by 
section  5195,  and  the  cities  of  St.  Louis  and  Chicago 


REGULATION   OF  THE  BANKING   BUSINESS.  73 

named  as  reserve  cities  under  sections  5191  and  5192  were 
designated,  on  March  18  and  May  2,  1887,  respectively,  as 
central  reserve  cities  by  the  Comptroller  of  the  Currency 
with  the  concurrence  of  the  Secretary  of  the  Treasury, 
under  the  authority  granted  by  the  act  of  March  3,  1887. 

In  conformity  with  the  provisions  of  the  acts  of  March 
3,  1887,  and  March  3,  1903,  the  following  cities  have  been 
designated  by  the  Comptroller  as  additional  reserve 
cities :  Atlanta,  Brooklyn,  Cedar  Rapids,  Columbus,  Dal- 
las, Denver,  Des  Moines,  Dubuque,  Fort  Worth,  Galves- 
ton, Houston,  Indianapolis,  Kansas  City  (Kans.),  Kansas 
City  (Mo.),  Lincoln,  Los  Angeles,  Minneapolis,  Musko- 
gee, Oklahoma  City,  Omaha,  Portland,  Pueblo,  Rich- 
mond, Salt  Lake  City,  San  Antonio,  Savannah,  Seattle, 
Sioux  City,  South  Omaha,  Spokane,  St.  Joseph,  St.  Paul, 
Tacoma,  Topeka,  Waco,  Wichita.  On  June  26,  1915, 
South  Omaha  was  consolidated  with  Omaha. 

TIk'  Federal  reserve  act  confers  authority  upon  the 
Federal  Reserve  Board  to  add  to  the  number  of  cities 
classified  as  reserve  cities,  to  reclassify  existing  reserve 
and  central  reserve  cities,  or  to  terminate  their  designa- 
tion as  such.  (See  sec.  11,  paragraph  E,  Federal  reserve 
act.) 

Acting  under  the  authority  of  this  section  the  Federal 
Reserve  Board  has  designated  the  following  additional 
reserve  cities:  Birmingham,  Ala.;  Charleston,  S.  C: 
Chattanooga  and  Nashville,  Tenn. ;  Tulsa,  Okla.;  and 
Ogden,  Utah.] 

Note. — Sections  5191  and  5192  have  not  been  repealed,  but  the 
provisions  with  respect  to  specific  reserve  requirements  for  banks 
in  the  continental  United  States  are  superseded  by  section  19  of 
the  Federal  reserve  act  as  amended  June  21,  1917,  these  sections, 
however,  remaining  in  full  force  and  effect  for  national  banks 
located  in  Alaska  or  in  a  dependency  or  insular  possession  or  any 
part  of  the  United  States  outside  the  continental  United  States, 
provided  said  national  banks  remain  nonmember  banks.  The  sec- 
tions in  question  are  as  follows,  the  italicized  portion  being  super- 
seded, as  far  as  banks  in  the  continental  United  States  are  con- 
cerned, by  later  legislation,  the  remaining  portions  of  these  sec- 
tions being  still  in  force. 

Sec.  5191.  Every  national  hanking  association  in  either  of  the 
folloiving  cities:  Albany,  Baltimore,  Boston,  Cincinnati,  Chicago, 
Cleveland,  Detroit,  Louisville,  Milwaukee,  New  Orleans.  New  York, 
Philadelphia,  Pittshurgh,  St.  Louis,  San  Francisco,  and  Washing- 
ton, shall  at  all  times  hare  on  hand,  in  lawful  money  of  the 
United  States,  an  amount  equal  to  at  least  ticcnty-flve  per  centum 
of  the  aggregate  amount  of  its  notes  in  circulation  and  its  de- 
posits; and  every  other  association  shall  at  all  times  have  on  hand, 
in  lawful  money  of  the  United  States,  an  amount  cquat^to  at  least 
fifteen  per  centum  of  the  aggregate  amount  of  its  notes  in  circular 
tion,  and  of  its  deposits. 

Whenever  the  lawful  money  of  any  association  in  any  of  the 
cities  named  shall  be  below  tlie  amount  of  tioenty-five  per  centum 
of  its  circulation  and  deposits  and  whiMiovcr  the  lawful  money 
of  any  other  association  shall  be  (below  fifteen  per  centum  of  its 
circuUition  o?!(Z  deposits),  such  associations  shall  not  Increase  its 
liabilities  by  making  any  new  loans  or  discounts  otherwise  tliau 
by  dicounting  or  purchasing  bills  of  exchange  payable  at  sight, 
Qor  make  any  dividends  of  its  profits  until  the  required  propor- 


74  REGULATION   OF   THE   BANKING   BUSINESS. 

tion,  between  the  aggregate  amount  of  its  outstanding  notes  of 
circulation  and  deposits  and  its  lawful  money  of  the  United 
States,  has  been  restored.  And  the  Comptroller  of  the  Currency 
may  notify  any  association,  whose  lawful  money  reserve  shall 
be  below  the  amount  above  required  to  be  kept  on  hand,  to  make 
good  such  reserve ;  and  if  such  association  shall  fail  for  thirty 
days  thereafter  so  to  make  good  its  reserve  of  lawful  money,  the 
Comptroller  may,  with  the  concurrence  of  the  Secretary  of  the 
Treasury,  appoint  a  receiver  to  wind  up  the  business  of  the  asso- 
ciation, as  provided  in  section  fifty-two  hundred  and  thirty-four. 

Sec.  5192.  Three-fifths  of  the  reserve  of  fifteen  per  centum  re- 
quired by  the  preceding  section  to  be  kept,  may  consist  of  balances 
due  to  an  association,  available  for  the  redemption  of  its  circulat- 
ing notes,  from  associations  approved  by  the  Comptroller  of  the 
Currency,  organized  tinder  the  act  of  June  three,  eighteen  hun- 
dred and  sixty-four,  or  under  this  title,  and  doing  business  in 
the  cities  of  Albany,  Baltimore,  Boston,  Charleston,  Chicago,  Cin- 
cinnati, Cleveland,  Detroit,  Louisville,  Milwaukee,  New  Orleans, 
New  York,  Philadelphia,  Pittsburgh,  Richmond,  St.  Louis,  San 
Francisco,  and  Washington.  Clearing-house  certificates,  repre- 
senting specie  or  lawful  money  specially  deposited  for  the  purpose, 
of  any  clearing-house  association,  shall  also  be  deemed  to  be  law- 
ful money  in  the  possession  of  any  association  belonging  to  such 
clearing  house,  holding  and  owning  such  certificate,  within  the 
preceding  section. 

The  provisions  in  section  5191  requiring  reserve  to  be  held 
against  circulation  were  repealed  by  section  2,  act  of  June  20, 
ISl-i,  ivJiich  provides  "  that  section  31  of  the  National  Bank  act 
{sections  5191  and  5192  R.  S.)  be  so  amended  that  the  several 
associations  therein  provided  for  shall  not  hereafter  be  required 
to  keep  on  hand  any  amount  of  money  ivhatcver,  by  reason  of  the 
amount  of  their  respective  circulations ;  but  the  moneys  required 
by  said  section  to  be  kept  at  all  times  on  hand  shall  be  determined 
by  the  amount  of  deposits  in  all  respects,  as  provided  for  in  the 
said  section. 

Additional  reserve  cities  (act  of  March  3,  1903,  amending  act  of 
March  3,  1887). — Sec.  1.  That  ichcnevcr  three-fourths  in  num- 
ber of  the  national  banks  located  in  any  city  of  the  United  States 
having  a  population  of  twenty-five  thousand  people  shall  make 
application  to  the  Comptroller  of  the  Currency,  in  ivriting,  asking 
that  the  name  of  the  city  in  tohich  such  banks  are  located  shall 
be  added  to  the  cities  named  in  sections  fifty-one  hundred  and 
ninety-one  and  fifty-one  hundred  and  ninety-two  of  the  Revised 
Statutes,  the  Comptroller  shall  have  authority  to  grant  such  re- 
quest, and  every  bank  located  in  such  city  shall  at  all  times  there- 
after have  on  hand,  in  lawful  money  of  the  United  States,  an 
amount  equal  to  at  least  twenty- five  per  centum  of  its  deposits, 
as  provided  in  sections  fifty-one  hundred  and  ninety-one  and  fifty- 
one  hundred  and  ninety-five  of  the  Revised  Statutes. 

BANK  EESERVES. 

DEMAND  AND  TIME  DEPOSITS  DEFINED. 

Act  Dec.  23,      403.  Sec.  19. — Demand  deposits  within  the  meaning?  of 
as'^'sut.'  ^L.i  this  act  shall  comprise  all  deposits  payable  within  thirty 
^^\ct  June  "i'  f^^ys?  ^^^  time  deposits  shall  comprise  all  deposits  pay- 
ion,  sec.^^io".  '  able  after  thirty  days,  all  savings  accounts  and  certificates 
of  deposit  which  are  subject  to  not  less  than  thirty  days' 
notice  before  payment,  and  all  postal  savings  deposits. 


REGULATION   OF   THE  BANKING   BUSINESS.  75 

RESERVE  REQUIREMENTS.      . 

404.  Every  bank,  banking  association,  or  trust  com-  Act  Dec  23. 
pan}^  which  is  or  which  becomes  a  member  of  any  Federal  :^H^"'staT  ^V, 
reserve  bank  shall  establish  and  maintain  reserve  bal-  ^"o.^^  ^^^^  ^^' 
ances  with  its  Federal  reserve  bank  as  follows :  1917,  sec.  lo. ' 

RESERVE  REQUIREMENTS  FOR  BANKS  NOT  IN  RESERVE 
CITIES. 

405.  (a)  If  not  in  a  reserve  or  central  reserve  city,  as  ^  Act  Dec.  23, 
now  or  hereafter  defined,  it  shall  hold  and  maintain  with  ag^^'st^at'  \.\ 
the  Federal  reserve  bank  of  its  district  an  actual  net  bal-  -"^-^j.  j^^^  21. 
ance  equal  to  not  less  than  seven  per  centum  of  the  i9i7,  sec.  10.' 
aggregate  amount  of  its  demand  deposits  and  three  per 

centum  of  its  time  deposits. 

RESERVE    REQUIREMENTS    FOR    BANKS    IN    RESERVE 
CITIES. 

406.  (5)  If  in  a  reserve  city,  as  now  or  hereafter  de-  Act  Dec.  23. 
fined,  it  shall  hold  and  maintain  with  the  Federal  reserve  ,^|^^'g4\^-  i£; 
bank  of  its  district  an  actual  net  balance  equal  to  not  less  270. 

than  ten  per  centum  of  the  aggregate  amount  of  its  de-  igff*  ts^stlt! 
mand  deposits  and  three  per  centum  of  its  time  deposits:  ^-^^^^juue  •>! 
Provided,  hoicever,  That  if  located  in  the  outlying  dis-  1917,  sec.  10.  ' 
tricts  of  a  reserve  city  or  in  territory  added  to  such  a  city  ^.^^^^  ^^p*'  '^^' 
by  the  extension  of  its  corporate  charter,  it  may,  upon 
the  affirmative  vote  of  five  members  of  the  Federal  Re- 
serve Board,  hold,   and  maintain  the  reserve  balances 
specified  in  paragraph  (a)  hereof. 

RESERVE  REQUIREMENTS  FOR  BANKS  IN  CENTRAL  RE- 
SERVE CITIES. 

407.  {c)  If  in  a  central  reserve  city,  as  now  or  here-  j^-^|t  ^^^-  ^^\ 
after  defined,  it  shall  hold  and  maintain  with  the  Federal  ^  stat."  l.! 
reserve  bank  of  its  district  an  actual  net  balance  equal  to  "'Act  Aug.  15. 
not  less  than  thirteen  per  centum  of  the  aggregate  amount  }^^^^^||^^  ^**'*- 
of  its  demand  deposits  and  three  per  centum  of  its  time  Act  .tune  21. 
deposits:  Provided,  however,  That  if  located  in  the  out-  ^^.Ic't  fept!  26. 
13'ing  districts  of  a  central  reserve  city  or  in  territory  i^is, 
added  to  such  city  by  the  extension  of  its  corporate  char- 
ter, it  may.  upon  the  affirmative  vote  of  five  members  of 

the  Federal  Reserve  Board,  hold  and  maintain  the  reserve 
balances  specified  in  paragraphs  {a)  or  {b)  thereof. 

MEMBER  BANK  FORBIDDEN  TO  KEEP  ON  DEPOSIT  WITH 
NONMEMBER  BANK  A  SUM  IN  EXCESS  OF  TEN  PER 
CENT  OF  ITS  OWN  CAPITAL  AND  SURPLUS  OR  TO 
SECURE  DISCOUNTS  FOR  NONMEMBER  BANK. 

408.  Xo  member  bank  shall  keep  on  deposit  with  any  j.,-^.f*  ^^e^-  ^^i 
State  bank  or  trust  company  which  is  not  a  member  bank  j5s  'stat  l,' 
a  sum  in  excess  of  ten  per  centum  of  its  own  paid-up 


76  REGULATION   OF   THE   BAN-RING   BUSINESS. 

1914*  38^stat'  Capital  and  surplus.  No  member  bank  shall  act  as  the 
L.,  691.  '  medium  or  agent  of  a  nonmember  bank  in  applying  for  or 

i9i7%ec°io"^' receiving  discounts  from  a  Federal  reserve  bank  under  the 
provisions  of  this  act,  except  by  permission  of  the  Fed- 
eral Reserve  Board. 

WITHDRAWAL  OF  EESERTE  BY  MEMBER  BANK. 

lots*  ^^^'  1^9^'     ^^^'  "^^^  required  balance  carried  by  a  member  bank 
38     Stat'    L.',  with  a  Federal  reserve  bank  may,  under  the  regulations 
^^ict  Aug.  15,  and  subject  to  such  penalties  as  may  be  prescribed  by  the 
if^ejji^^  st^*- Federal   Reserve  Board,  be  checked  against  and  with- 
"Act  June  21.  drawn  by  such  member  bank  for  the  purpose  of  meeting 
1917,  sec.  10.    existing  liabilities:  /^;'oy?V/ec^,   however^  That  no   bank 
shall  at  any  time  make  new  loans  or  shall  pay  anj^  divi- 
dends unless  and  until  the  total  balance  required  by  law 
is  fully  restored. 

RESERYE  REQUIREMENTS— HOW  ESTIMATED. 

1913,*  sec?'  1^9^;'  ^l^-  ^^  estimating  the  balances  required  by  this  act 
38    'stat.'    L.;  the  net  difference  of  amounts  due  to  and  from  other  banks 

Act  Aug.  15,  shall  be  taken  as  the  basis  for  ascertaining  the  deposits 
if, ^6^2^^  ^*^*'  against  which  required  balances  with   Federal  reserve 

Act  June  21,  banks  shall  be  determined. 

1917,  sec.  10. 

RESERYE  REQUIREMENTS  FOR  NATIONAL  BANKS  LO- 
CATED IN  ALASKA  OR  OUTSIDE  THE  CONTINENTAL 
UNITED  STATES. 

19^3*  J^c?'  1^9^;'     ^11-  National  banks,  or  banks  organized  under  local 

38    Stat."    L.',  laws,  locatcd  in  Alaska  or  in  a  dependency  or  insular  pos- 

Act  Aug.  15,  session  or  any  part  of  the  United  States  outside  the  con- 

^^m^^  ^*'^*- tinental  United  States  may  remain  nonmember  banks, 

Act  Jun^  21.  and  shall  in  that  event  maintain  reserves  and  comply  with 

all  the  conditions  now  provided  by  law  regulating  them ; 

or  said  banks  may,  with  the  consent  of  the  Reserve  Board, 

become  member  banks  of  anv  one  of  the  reserve  districts, 

and  shall  in  that  event  take  stock,  maintain  reserves,  and 

be  subject  to  all  the  other  provisions  of  this  act. 

REDEMPTION  FUND  NOT  COUNTED  AS  RESERYE. 

Act  Dec.  23,  412.  Sec.  20. — So  much  of  sections  two  and  three  of  the 
38  'stat.'  "l.',  act  of  June  twentieth,  eighteen  hundred  and  seventy- 
^'^^'  four,  entitled  "An  act  fixing  the  amount  of  United  States 

notes,  providing  for  a  redistribution  of  the  national-bank 
currency,  and  for  other  purposes,"  as  provides  that  the 
fund  deposited  by  any  national  banking  association  with 
the  Treasurer  of  the  United  States  for  the  redemption  of 
its  notes  shall  be  counted  as  a  part  of  its  lawful  reserve  as 
provided  in  the  act  aforesaid,  is  hereby  repealed.  And 
from  and  after  the  passage  of  this  act  such  fund  of  five 
per  centum  shall  in  no  case  be  counted  by  any  national 
banking  association  as  a  part  of  its  lawful  reserve. 


REGULATION   OF  THE   BANKING   BUSINESS.  77 

NO  RESERTE  REQUIRED  TO  BE  HELD  AGAINST  UNITED 
STATES  UEPOSITS. 

413.  Sec.  7. — *  *  *  That  the  provisions  of  section  ^^ Act  ^Apr.^  24. 
fifty-one  hundred  and  ninety-one  of  the  Revised  Statutes, 

as  amended  by  the  Federal  reserve  act  and  the  amend- 
ments thereof,  with  reference  to  the  reserves  required  to 
be  kept  by  national  banking  associations  and  other  mem- 
ber banks'  of  the  Federal  Reserve  System,  shall  not  apply 
to  deposits  of  public  moneys  by  the  United  States  in  des- 
ignated depositaries. 

PROTISIONS  FOR  REDEEMING  CIRCULATION.     FITE  PER 
CENT  REDEMPTION  FUND.     ACT  JUNE  20,  1874. 

414.  Sec.  3. — That  every  association  organized,  or  to  be  jgif^*  '^c'l^^sls; 
organized,  under  the  provisions  of  the  said  act,  and  of  sec  |:  is  stat! 
the  several  acts  amendatory  thereof,  shall  at  all  times    ' 

keep  and  have  on  deposit  in  the  Treasury  of  the  United 
States,  in  lawful  money  of  the  United  States,  a  sum  equal 
to  five  per  centum  of  its  circulation,  to  be  held  and  used 
for  the  redemption  of  such  circulation ;  [which  sum  shall 
he  counted  as  a  part  of  its  lawful  reserve,  as  provided  in 
section  two  of  this  act;]  and  when  the  circulating  notes 
of  any  such  associations,  assorted  or  unassorted,  shall  be 
presented  for  redemption,  in  sums  of  one  thousand  dol- 
lars, or  any  multiple  thereof,  to  the  Treasurer  of  the 
United  States,  the  same  shall  be  redeemed  in  United 
States  notes.  All  notes  so  redeemed  shall  be  charged 
by  the  Treasurer  of  the  United  States  to  the  respec- 
tive associations  issuing  the  same,  and  he  shall  notify 
them  severally,  on  the  first  day  of  each  month,  or  oftener, 
at  his  discretion,  of  the  amount  of  such  redemptions ;  and 
whenever  such  redemptions  for  any  association  shall 
amount  to  the  sum  of  five  hundred  dollars,  such  associa- 
tion so  notified  shall  forthwith  deposit  with  the  Treas- 
urer of  the  United  States  a  sum  in  United  States  notes 
equal  to  the  amount  of  its  circulating  notes  so  redeemed. 
And  all  notes  of  national  banks  worn,  defaced,  mutilated, 
or  otherwise  unfit  for  circulation  shall,  when  received  by 
any  assistant  treasurer,  or  at  any  designated  depository 
of  the  United  States,  be  forwarded  to  the  Treasurer 
of  the  United  States  for  redemption  as  provided  herein. 
And  when  such  redemptions  have  been  so  reimbursed,  the 
circulating  notes  so  redeemed  shall  be  forwarded  to  the  , 
respective  associations  by  which  they  were  issued ;  but  if 
any  of  such  notes  are  worn,  mutilated,  defaced,  or  ren- 
dered otherwise  unfit  for  use,  they  shall  be  forwarded  to 
the  Comptroller  of  the  Currency  and  destroyed  and  re- 
placed as  now  provided  by  law :  Provided,  That  each  of 
said  associations  shall  reimburse  to  the  Treasury  the 
charges  for  transportation,  and  the  costs  for  assorting 
Buch  notes;  and  the  associations  hereafter  organized  shall 


78  KEGULATION   OF   THE  BA:NKING  BUSINESS. 

also  severally  reimburse  to  the  Treasury  the  cost  of  en- 
graving such  plates  as  shall  be  ordered  by  each  associa- 
tion, respectively;  and  the  amount  assessed  upon  each 
association  shall  he  in  proportion  to  the  circulation  re- 
deemed, and  be  charged  to  the  fund  on  deposit  with  the 
Treasurer:  And  provided  further,  That  so  much  of  sec- 
tion thirty-two  of  said  national-bank  act  requiring  or 
permitting  the  redemption  of  its  circulating  notes  else- 
where than  at  its  own  counter  except  as  provided  for  in. 
this  section,  is  hereby  repealed. 

Note. — Under  section  4  of  the  act  of  June  20,  1874,  chapter  343, 
a  national  banking  association,  desiring  to  withdraw  its  circulat- 
ing notes  and  take  up  the  bonds  deposited  with  the  United  States 
Treasurer  as  security  therefor,  may  do  so  by  depositing  with  the 
Treasurer  the  requii'ed  amount  in  lawful  money,  whether  this 
consists  of  coin  or  of  legal-tender  notes.  The  Treasury,  while 
privileged  under  sections  3  and  4  of  that  act  to  redeem  such  cir- 
culation in  United  States  notes,  has  also  the  right  to  redeem  the 
same  circulation  in  coin.  (Opinion  Attorney  General,  vol.  17, 
121.) 

Section  32  of  national-bank  act  is  section  .5195,  Revised  Statutes. 
The  provision  permitting  the  redemption  fund  to  be  counted  as 
part  of  the  lawful  reserve  was  repealed  by  section  20  of  the 
Federal  reserve  act. 

Other  sections  of  act  of  June  20,  1874. 

Section  1  precedes  Revised  Statutes,  5133. 
Section  2.     See  note  under  paragraph  402,  ante. 
Section  4  follows  Revised  Statutes,  5167. 
'  Section  5  follows  Revised  Statutes,  5172. 

Section  6  relates  to  United  States  notes  only. 
Sections   7-9   superseded   by   act   of  January   14,   1875,   which 
follows.  Revised  Statutes,  5177. 

CLERICAL   FORCE    FOR    REDEMPTION    OF    CIRCULATING 
NOTES.     ACT  MARCH  3,  1875. 

1875*  LS^stat'  ^^^"  '^^^^  ^^  Carry  into  effect  the  provisions  of  sec- 
L.,  399 ;  part  tiou  three  of  the  act  entitled  "An  act  fixing  the  amount 
ci  yn  ^appnf-  of  United  States  notes,  providing  for  a  redistribution  of 
priation  act.  the  natioual-bauk'  currency,  and  for  other  purposes," 
approved  June  twentieth,  eighteen  hundred  and  seventy- 
four,  the  Secretary  of  the  Treasury  is  authorized  to  ap- 
point the  following  force,  to  be  employed  under  his  direc- 
tion, namely:  In  the  Office  of  the  Treasurer:  *  *  * 
In  the  Office  of  the  Comptroller  of  the  Currency  *  *  * 
And  at  the  end  of  each  month,  the  Secretary  of  the  Treas- 
ury shall  reimburse  the  Treasury  to  the  full  amount  paid 
out  under  the  provisions  of  this  section  by  transfer  of 
said  amount  from  the  deposit  of  the  national  banking  as- 
sociations with  the  Treasury  of  the  United  States ;  and  at 
the  end  of  each  fiscal  year  he  shall  transfer  from  said 
deposit  to  the  Treasury  of  the  United  States  such  sum 
as  may  have  been  actually  expended  under  his  direction 
for  stationery,  rent,  fuel,  light,  and  other  necessary  inci- 
dental expenses  which  have  been  incurred  in  carrying 


REGULATION   OF   THE   BANKING   BUSINESS.  79 

into  effect  the  provisions  of  the  said  section  of  the  above- 
named  act. 

Note. — -The  appropriation  bill  for  each  year  fixes  th('  number 
and  compensation  of  tlie  clerks  employed  in  the  offices  of  the 
Treasurer  of  the  United  States  and  Comptroller  of  the  Currency 
in  connection  with  the  redemption  of  circulating  notes. 

DISPOSITION  OF  REDEMPTION  ACCOUNT.     ACT  JULY  14, 
1890. 

416.  Sec.  6.— That  upon  the  passage  of  this  act  the  ^g^o^*  ^^"'y^Jll 
balances  standing  with  the  Treasurer  of  the  United  sec.  6 ;  26  stat! 
States  to  the  respective  credits  of  national  banks  for  de-    " 

posits  made  to  redeem  the  circulating  notes  of  such 
banks,  and  all  deposits  thereafter  received  for  like  pur- 
pose, shall  be  covered  into  the  Treasury  as  a  miscellane- 
ous receipt,  and  the  Treasury  of  the  United  States  shall 
redeem  from  the  general  cash  in  the  Treasury  the  circu- 
lating notes  of  said  banks  which  may  come  into  his  pos- 
session subject  to  redemption ;  and  upon  the  certificate 
of  the  Comptroller  of  the  Currency  that  such  notes  have 
been  received  by  him  and  that  they  have  been  destroyed 
and  that  no  new  notes  will  be  issued  in  their  place,  reim- 
bursement of  their  amount  shall  be  made  to  the  Treas- 
urer, under  such  regulations  as  the  Secretary  of  the 
Treasury  may  prescribe,  from  an  appropriation  hereby 
created,  to  be  known  as  "  national-bank  notes ;  Redemp- 
tion account,"  but  the  provisions  of  this  act  shall  not 
apply  to  the  deposits  received  under  section  three  of  the 
act  of  June  twentieth,  eighteen  hundred  and  seventy- 
four,  requiring  every  national  bank  to  keep  in  lawful 
money  with  the  Treasurer  of  the  United  States  a  sum 
equal  to  five  per  centum  of  its  circulation,  to  be  held 
and  used  for  the  redemption  of  its  circulating  notes: 
and  the  balance  remaining  of  the  deposits  so  covered 
shall,  at  the  close  of  each  month,  be  reported  on  the 
monthly  public  debt  statement  as  debt  of  the  United 
States  bearing  no  interest. 

Note. — The  other  sections  of  this  act  relate  to  the  purchase  of 
silver  bullion  and  issue  of  Treasury  notes. 

REDEMPTION  OF  LOST  OR  STOLEN  NOTES,  AND  OF  NOTES 
NOT  PROPERLY  SIGNED.  ACT  JULY  28,  1892. 

417.  That  the  provisions  of  the  Eevised  Statutes  of  the    Act  J"iy  28, 
United  States,  providing  for  the  redemption  of  national  l:,  322. 
bank  notes,  shall  apply  to  all  national  bank  notes  that 

have  been  or  may  be  issued  to,  or  received  by,  any  na- 
tional bank,  notwithstanding  such  notes  may  have  been 
lost  by  or  stolen  from  the  bank  and  put  in  circulation 
without  the  signature  or  upon  the  forged  signature  of  the 
president  or  vice  president  and  cashier. 


80  EEGULATIOlSr   OF  THE  BANKING  BUSINESS. 

418.  Sec.  5193.— 

Repealed  by  act  March  14,  1900. 

Note. — This  section  as  enacted  June  8,  1872  (17  Stat.  L.,  337), 
authorized  the  Secretary  of  the  Treasui-y  to  receive  on  deposit 
from  national  banking  associations  United  States  notes  in  sums 
of  not  less  than  ten  thousand  dollars  and  to  issue  certificates 
therefor  payable  on  demand  in  denominations  of  not  less  than 
five  thousand  dollars.  This  was  repealed  by  act  March  14,  1900, 
section  6,  paragraph  752,  post,  which  provides  for  issue  of  gold 
certificates  payable  to  order  in  denominations  of  ten  thousand 
dollars. 

419.  Sec.  5194.— 

Dependent  on  5193  and  superseded  by  its  repeal. 

PLACE  FOR  REDEMPTION  OF  CIRCULATING  NOTES  TO  BE 
DESIGNATED. 

420.  Sec.  5195.— 

See  note  under  paragraph  401,  ante. 

NATIONAL  BANKS  TO  TAKE  NOTES  OF  OTHER  NATIONAL 
BANKS  AT  PAR. 

Act  June  3,  421.  Sec.  5196. — Every  national  banking  association 
8  e^c'  32 ;  13  formed  or  existing  under  this  Title,  shall  take  and  receive 
^*Act^juiy^^i2,  ^t  P^^5  for  ^^J  ^"^'^t  or  liability  to  it,  any  and  all  notes  or 
1870,  c.  282;  bills  issued  by  any  lawfully  organized  national  banking 
L.r253/^   *^*'  association.     But  this  provision  shall  not  apply  to  any 

association  organized  for  the  purpose  of  issuing  notes 

payable  in  gold. 

LIMITATION  UPON  RATE  OF  INTEREST  WHICH  MAY  BE 
TAKEN. 

1864*  c°°1.06'  ^^^'  ^®^'  ^l^''- — ^^y  association  may  take,  receive, 
B  e  c'  30 ;  13  reserve,  and  charge  on  any  loan  or  discount  made,  or  upon 
Stat.  L.,  108.  ^^^y  note,  bill  of  exchange,  or  other  evidences  of  debt, 
interest  at  the  rate  allowed  by  the  laws  of  the  State,  Ter- 
ritory, or  District  where  the  bank  is  located,  and  no  more, 
except  that  where  by  the  laws  of  any  State  a  different 
rate  is  limited  for  banks  of  issue  organized  under  State 
laws,  the  rate  so  limited  shall  be  allowed  for  associations 
organized  or  existing  in  any  such  State  under  this  Title. 
When  no  rate  is  fixed  by  the  laws  of  the  State,  or  Terri- 
tory, or  District,  the  bank  may  take,  receive,  reserve,  or 
charge  a  rate  not  exceeding  seven  per  centum,  and  such 
interest  may  be  taken  in  advance,  reckoning  the  days  for 
which  the  note,  bill,  or  other  evidence  of  debt  has  to  run. 
And  the  purchase,  discount,  or  sale  of  a  bona  fide  bill  of 
exchange,  payable  at  another  place  than  the  place  of  such 
purchase,  discount,  or  sale,  at  not  more  than  the  current 
rate  of  exchange  for  sight  drafts  in  addition  to  the  in- 
terest, shall  not  be  considered  as  taking  or  receiving  a 
greater  rate  of  interest. 


REGULATION    OF    THE    BANKING    BUSINESS.  81 

PENALTir   FOR   TAKING   UNLAWFUL   INTEREST.     JURIS-     Act   Tune   3, 
DICTION  OF  SUITS  BY  OR  AGAINST  NATIONAL  BANKS.  ^7*-    30      i^ 

Stat.  L     108. 

423.  Sec.  5198  [as  amended  1875].— The  taking,  receiv- i875.*c.  80:\^8 
ing,  reserving,  or  charging  a  rate  of  interest  greater  than  ^^^^-  ^-  22^- 
is  allowed  by  the  preceding  section,  when  knowingly  done, 

shall  be  deemed  a  forfeiture  of  the  entire  interest  which 
the  note,  bill,  or  other  evidence  of  debt  carries  with  it,  or 
which  has  beeii  agreed  to  be  paid  thereon.  In  case  the 
greater  rate  of  interest  has  been  paid,  the  person  by 
whom  it  has  been  paid,  or  his  legal  representative,  may 
recover  back,  in  an  action  in  the  nature  of  an  action  of 
debt,  twice  the  amount  of  the  interest  thus  paid  from  the 
association  taking  or  receiving  the  same;  provided  such 
action  is  commenced  within  two  years  from  the  time  the 
usurious  transaction  occurred.  That  suits,  actions,  and 
proceedings  against  any  association  under  this  Title  may 
be  had  in  any  circuit,  district,  or  territorial  court  of  the 
United  States  held  within  the  district  in  which  such  asso- 
ciation'may  be  established,  or  in  any  State,  county,  or 
municipal  court  in  the  county  or  city  in  which  said  asso- 
ciation is  located  having  jurisdiction  in  similar  cases. 

Note. — Additional  provisions  relating  to  jurisdiction  of  actions 
by  and  against  national  banks  are  contained  in  act  July  12,  1882, 
paragraph  218,  ante,  and  act  of  August  13,  1888,  paragraph  214, 
ante.  See  also  section  24,  judiciary  act  passed  March  3,  1911, 
paragraph  701.  post,  and  section  736,  Revised  Statutes  of  the 
United  States,  paragraph  702,  post,  as  to  jurisdiction  of  district 
courts  to  enjoin  Comptroller  under  section  5237,  Revised  Statutes, 
United  States. 

DIVIDENDS. 

424.  Sec.  5199. — The  directors  of  any  association  may    Act  June  3, 
semiannually,  declare  a  dividend  of  so  much  of  the  net  l^^^.'   is :  ^Ts 
profits  of  the  association  as  they  shall  judge  expedient;  stat.  l.,  109. 
but  each  association  shall,  before  the  declaration  of  a 
dividend,  carry  one-tenth  part  of  its  net  profits  of  the 
preceding  half  year  to  its  surplus  fund  until  the  same 

shall  amount  to  twenty  per  centum  of  its  capital  stock. 

LIMITATION  OF  LIABILITIES  WHICH  MAY  BE  INCURRED 
BY  ANY  ONE  PERSON,  COMPANY,  ETC. 

425.  Sec.  5200  fas  amended  19191. — The  total  liabilities     Act  Oct.   22. 

i  •      J.-  J!  £  1919. 

to  any  association  01  any  person  or  01  any  company,  cor- 
poration, or  firm  for  money  borrowed,  including  in  the 
liabilities  of  a  company  or  firm  the  liabilities  of  the  sev- 
164312°— 20 6 


82  EEGULATION    OF    THE    BANKING    BUSINESS. 

eral  members  thereof,  shall  at  no  time  exceed  10  per 
centum  of  the  amount  of  the  capital  stock  of  such  asso- 
ciation, actually  paid  in  and  unimpaired,  and  10  per 
centum  of  its  unimpaired  surplus  fund:  Provided^  how- 
ever. That  (1)  the  discount  of  bills  of  exchange  drawn  in 
good  faith  against  actually  existing  values,  including 
drafts  and  bills  of  exchange  secured  by  shipping  docu- 
ments conveying  or  securing  title  to  goods  shipped,  and 
including  demand  obligations  when  secured  by  docu- 
ments covering  commodities  in  actual  process  of  ship- 
ment, and  also  including  bankers'  acceptances  of  the  kinds 
described  in  section  13  of  the  Federal  reserve  act,  (2)  the 
discount  of  commercial  or  business  paper  actually  owned 
by  the  person,  company,  corporation,  or  firm  negotiating 
the  same,  (3)  the  discount  of  notes  secured  by  shipping 
documents,  warehouse  receipts,  or  other  such  documents 
conveying  or  securing  title  covering  readily  marketable 
nonperishable  staples,  including  live  stock,  when  the 
actual  market  value  of  the  property  securing  the- obliga- 
tion is  not  at  any  time  less  than  115  per  centum  of  the 
face  amount  of  the  notes  secured  by  such  documents  and 
when  such  property  is  fully  covered  by  insurance,  and 
(4)  the  discount  of  any  note  or  notes  secured  by  not  less 
than  a  like  face  amount  of  bonds  or  notes  of  the  United 
States  issued  since  April  24,  1917,  or  certificates  of  in- 
debtedness of  the  United  States,  shall  not  be  considered 
as  money  borrowed  within  the  meaning  of  this  section. 
The  total  liabilities  to  any  association,  of  any  person  or 
of  any  corporation,  or  firm,  or  company,  or  the  several 
members  thereof  upon  any  note  or  notes  purchased  or  dis- 
counted by  such  association  and  secured  by  bonds,  notes, 
or  certificates  of  indebtedness  as  described  in  (4)  hereof 
shall  not  exceed  (except  to  the  extent  permitted  by  rules 
and  regulations  prescribed  by  the  Comptroller  of  the 
Currency,  with  the  approval  of  the  Secretary  of  the 
Treasury)  10  per  centum  of  such  capital  stock  and  sur- 
plus fund  of  such  association  and  the  total  liabilities  to 
an}''  association  of  any  person  or  of  any  corporation,  or 
firm,  or  company,  or  the  several  members  thereof  for 
money  borrowed,  including  the  liabilities  upon  notes 
secured  in  the  manner  described  under  (3)  hereof,  except 
transactions  (1),  (2),  and  (4),  shall  not  at  any  time  ex- 
ceed 25  per  centum  of  the  amount  of  the  association's 
paid-in  and  unimpaired  capital  stock  and  surplus.  The 
exception  made  under  (3)  hereof  shall  not  apply  to  the 
notes  of  any  one  person,  corporation  or  firm  or  company, 


BEGULATION    OF    THE    BANKING    BUSINESS.  83 

or  the  several  members  thereof  for  more  than  six  months 
in  any  consecutive  twelve  months. 

Note. — See  Act  March  3,  1919.  "  Victory  Liberty  Loan  Act," 
section  1,  wliich  provides  tliat  the  word  "  bonds,"  where  it  ap- 
pears in  section  5200  of  the  Revised  Statutes,  as  amended,  shall 
be  deemed  to  include  notes  issued  under  the  "  Victory  Liberty 
Loan  Act." 

ASSOCIATIONS  MUST  NOT  LOAN  ON  OR  PURCHASE  THEIR 
OWN  STOCK. 

426.  Sec.  5201. — No  association  shall  ciake  any  loan  or    Act  June  s. 
discount  on  the  security  of  the  shares  of  its  own  capital  sic.'    35;     1:5 
stock,  nor  be  the  purchaser  or  holder  of  any  such  shares,  ^*^*'  ^•'  ^^^■ 
unless  such  security  or  purchase  shall  be  necessary  to 

prevent  loss  upon  a  debt  previously  contracted  in  ^ood 
faith;  and  stock  so  purchased  or  acquired  shall,  within 
six  months  from  the  time  of  its  purchase,  be  sold  or  dis- 
posed of  at  public  or  private  sale ;  or,  in  default  thereof, 
a  receiver  may  be  appointed  to  close  up  the  business  of 
the  association,  according  to  section  fifty-two  hundred 
and  thirty -four. 

RESTRICTION  ON  BANK'S  INDEBTEDNESS. 

427.  Sec.  5202  [as  amended  1919]. — No  national  banking ^^Act^  ^m  %^' 
association  shall  at  any  time  be  indebted,  or  in  any  way  36;  'is '  stat.  l.; 
liable,  to  an  amount  exceeding  the  amount  of  its  capital  ^^Act  Dec.  23, 
stock  at  such  time  actually  paid  in  and  remaining  un- 19^3'  ^'^■^^'  ^ 
diminished  by  losses  or  otherwise,  except  on  account  of  Act  Apr.'  5, 
demands  of  the  nature  following:  ^^Act   oct.   22, 

First.  Notes  of  circulation.  ^s^^- 

Second.  Moneys  deposited  with  or  collected  by  the  asso- 
ciation. 

Third.  Bills  of  exchange  or  drafts  drawn  against 
money  actually  on  deposit  to  the  credit  of  the  association, 
or  due  thereto. 

Fourth.  Liabilities  to  the  stockholders  of  the  associa- 
tion for  dividends  and  reserve  profits. 

Fifth.  Liabilities  incurred  under  the  provisions  of  the 
Federal  Reserve  Act. 

Sixth.  Liabilities  incurred  under  the  provisions  of  the 
War  Finance  Corporation  Act. 

Seventh.  Liabilities  created  by  the  indorsement  of  ac- 
cepted bills  of  exchange  payable  abroad  actually  owned 
by  the  indorsing  bank  and  discounted  at  home  or  abroad. 


84  RBGUIiATION   OF  THE  BANKING  BUSINESS. 

RESTRICTION  UPON  USE  OF  CIRCULATING  NOTES. 

Act  June  3,  428.  Sec.  5203. — No  association  shall,  either  directly  or 
s  e  c'  37 ;  li  indirectly,  pledge  or  hypothecate  any  of  its  notes  or  cir- 
stat.  L.,  110.  culation,  for  the  purpose  of  procuring  money  to  be  paid 
in  on  its  capital  stock,  or  to  be  used  in  its  banking  oper- 
ations, or  otherwise ;  nor  shall  any  association  use  its  cir- 
culating notes,  or  any  part  thereof,  in  any  manner  or 
form,  to  create  or  increase  its  capital  stock. 

PROHIBITION   UPON    WITHDRAWAL    OF    CAPITAL.     UN- 
EARNED  DIVIDENDS  PROHIBITED. 

Act  June  ?.,  429.  Scc.  5204.— No  association,  or  any  member  thereof, 
sec'  38;  1^ shall,  during  the  time  it  shall  continue  its  banking  op- 
stat.  L.,  110.  erations,  withdraw,  or  permit  to  be  withdrawn,  either  in 
the  form  of  dividends  or  otherwise,  any  portion  of  its 
capital.  If  losses  have  at  any  time  been  sustained  by 
any  such  association,  equal  to  or  exceeding  its  undivided 
profits  then  on  hand,  no  dividend  shall  be  made;  and  no 
dividend  shall  ever  be  made  by  any  association,  while  it 
continues  its  banking  operations,  to  an  amount  greater 
than  its  net  profits  then  on  hand,  deducting  therefrom  its 
losses  and  bad  debts.  All  debts  due  to  any  association, 
on  which  interest  is  past  due  and  unpaid  for  a  period  of 
six  months,  unless  the  same  are  well  secured,  and  in  proc- 
ess of  collection,  shall  be  considered  bad  debts  within 
the  meaning  of  this  section.  But  nothing  in  this  section 
shall  prevent  the  reduction  of  the  capital  stock  of  the  as- 
sociation under  section  fifty-one  hundred  and  forty- 
three. 

ASSESSMENT  FOR  FAILURE  TO  PAT  UP  CAPITAL  ^-TOCK 
OR  FOR  IMPAIRMENT  OF  CAPITAL. 

Act  Mar.  3,     430.  Scc.  5205   [as  amended  18761. — Every  association 
see.  i ;  17  slat!  wliich  shall  have  failed  to  pay  up  its  capital  stock,  as  re- 
^"A^c't^june  30  Q^^i^'^d  by  law,  and  every  association  whose  capital  stock 
1876,    c.    156!  shall  have  become  impaired  by  losses  or  otherwise,  shall, 
L.%4!  ^^  ^*^*'  within  three  months  after  receiving  notice  thereof  from 
the  Comptroller  of  the  Currency,  pay  the  deficiency  in 
the  capital  stock,  by  assessment  upon  the  shareholders 
pro  rata  for  the  amount  of  capital  stock  held  by  each; 
and  the  Treasurer  of  the  United  States  shall  withhold 
the  interest  upon  all  bonds  held  by  him  in  trust  for  any 
such  association,  upon  notification  from  the  Comptroller 
of  the  Currency,  until  otherwise  notified  by  him.    If  any 
such  association  shall  fail  to  pay  up  its  capital  stock,  and 
shall  refuse  to  go  into  liquidation,  as  provided  by  law, 
for  three  months  after  receiving  notice  from  the  Comp- 
troller, a  receiver  may  be  appointed  to  close  up  the  busi- 
ness of  the  association,  according  to  the  provisions  of 
section    fifty-two    hundred    and   thirty-four:   And   pro- 
vided^ That  if  any  shareholder  or  shareholders  of  such 
bank  shall  neglect  or  refuse,  after  three  months'  notice,  to 


REGULATION   OF   THE   BANKING   BUSINESS.  85 

pay  the  assessment,  as  provided  in  this  section,  it  shall  be 
the  duty  of  the  board  of  directors  to  cause  a  suflicient  ' 
amount  of  the  capital  stock  of  such  shareholder  or  share- 
holders to  be  sold  at  public  auction  (after  thirty  days' 
notice  shall  be  given  by  posting  such  notice  of  sale  in  the 
office  of  the  bank,  and  by  publishing  such  notice  in  a  news- 
paper of  the  city  or  town  in  which  the  bank  is  located,  or 
in  a  newspaper  published  nearest  thereto),  to  make  good 
the  deficiency,  and  the  balance,  if  any,  shall  be  returned 
to  such  delinquent  shareholder  or  shareholders. 

PROHIBITION  AGAINST  UNCURRENT  NOTES. 

431.  Sec.  52O6.--N0  association  shall  at  any  time  payjg^f  c""%6' 
out  on  loans  or  discounts,  or  in  purchasing  drafts  or  bills  sec.'   36;    13 
of  exchange,  or  in  payment  of  deposits,  or  in  any  other  ^***"  ^'  "^' 
mode  pay  or  put  in  circulation,  the  notes  of  any  bank  or 
banking  association  which  are  not,  at  any  such  time, 
receivable,  at  par,  on  deposit,  and  in  payment  of  debts  by 

the  association  so  paying  out  or  circulating  such  notes; 
nor  shall  any  association  knowingly  pay  out  or  put  in 
circulation  any  notes  issued  by  any  bank  or  banking  asso- 
ciation which  at  the  time  of  such  paying  out  or  putting  in 
circulation  is  not  redeeming  its  circulating  notes  in  law- 
ful money  of  the  United  States. 

UNITED  STATES  NOTES  NOT  TO  BE  HELD  AS  €OLLAT- 
ERAL. 

432.  Sec.  5207.— No  association  shall  hereafter  offer  or  i8^^*/fo.\^^ 
receive  United   States  notes  or  national-bank  notes  as  stat.'  l.,  270. 
security  or  as  collateral  security  for  any  loan  of  money, 

or  for  a  consideration  agree  to  withhold  the  same  from 
use,  or  offer  or  receive  the  custody  or  promise  of  custody 
of  such  notes  as  security,  or  as  collateral  security,  or 
consideration  for  any  loan  of  money.  Any  association 
offending  against  the  provisions  of  this  section  shall  be 
deemed  guilty  of  a  misdemeanor,  and  shall  be  fined  not 
more  than  one  thousand  dollars  and  a  further  sum  equal 
to  one-third  of  the  money  so  loaned.  The  officer  or  offi- 
cers of  any  association  who  shall  make  any  such  loan 
shall  be  liable  for  a  further  sum  equal  to  one-quarter  of 
the  money  loaned ;  and  any  fine  or  penalty  incurred  by  a 
violation  of  this  section  shall  be  recoverable  for  the  bene- 
fit of  the  party  bringing  such  suit. 

ISSUE  OF  GOLD  CERTIFICATES.     ACT  .lULY  12,  1SS2. 

433.  Sec.  12. — That  the  Secretary  of  the  Treasury  is    Act  July  12, 
authorized  and  directed  to  receive  deposits  of  gold  coin  22^"'suu.'  ^l.'. 
*     *     *     and  issue  certificates  therefor     *     *     *.     Such  ^"^• 
certificates     *     *     *     when  held  by  any  national  bank- 
ing association,  sliall  be  counted  as  part  of  its  lawful 

reserve;  and  no  national  banking  association  shall  be  a 


86  REGULATION   OF   THE  BANKING  BUSINESS. 

member  of  an}^  clearing  house  in  which  such  certificates 
shall  not  be  receivable  in  the  settlement  of  clearing-house 
balances:  *  *  *  And  the  provisions  of  section  fifty- 
two  hundred  and  seven  of  the  Eevised  Statutes  shall  be 
applicable  to  the  certificates  herein  authorized  and  di- 
rected to  be  issued. 

Note. — This  section  given  in  full,  paragraph  729,  post.  See  also 
currency  act  of  March  14,  1900,  as  amended  March  4,  1907,  March 
2,  1911,  and  June  12,  1916,  paragraph  754,  post,  relating  to  gold 
certificates,  and  making  ten  dollars  lowest  denomination. 

PENALTY  FOR  FALSELY  CERTIFYING  CHECKS. 

i869*c^35';S  ^^^^  ^®^-  5208.— It  shall  be  unlawful  for  any  officer, 
Stat.'  L.,  335.  dircctor,  agent,  or  employee  of  any  Federal  reserve  bank, 
1918.*  ^^^'*  ^^'  or  of  any  memljer  bank  as  defined  in  the  act  of  December 
twenty-third,  nineteen  hundred  and  thirteen,  known  as 
the  Federal  reserve  act,  to  certify  any  check  drawn  upon 
such  Federal  reserve  bank  or  member  bank  unless  the 
person,  firm,  or  corporation  drawing  the  check  has  on 
deposit  with  such  Federal  reserve  bank  or  member  bank, 
at  the  times  such  check  is  certified,  an  amount  of  money 
not  less  than  the  amount  specified  in  such  check.  Any 
check  so  certified  by  a  duly  authorized  officer,  director, 
agent,  or  employee  shall  be  a  good  and  valid  obligation 
against  such  Federal  reserve  bank  or  member  bank ;  but 
the  act  of  any  officer,  director,  agent,  or  employee  of  any 
such  Federal  reserve  bank  or  member  bank  in  violation 
of  this  section  shall,  in  the  discretion  of  the  Federal  Re- 
serve Board,  subject  such  Federal  reserve  bank  to  the 
penalties  imposed  by  section  eleven,  subsection  (h),  of  the 
Federal  reserve  act,  and  shall  subject  such  member  bank 
if  a  national  bank  to  the  liabilities  and  proceedings  on  the 
part  of  the  Comptroller  of  the  Currency  provided  for  in 
section  fifty-two  hundred  and  thirty-four,  Revised 
Statutes,  and  shall,  in  the  discretion  of  the  Federal  Re- 
serve Board,  subject  any  other  member  bank  to  the  penal- 
ties imposed  by  section  nine  of  said  Federal  reserve  act 
for  the  violation  of  any  of  the  provisions  of  said  act. 
Any  officer,  director,  agent,  or  employee  of  any  Federal 
resarve  bank  or  member  bank  who  shall  willfully  violate 
the  provisions  of  this  section,  or  who  shall  resort  to  any 
device,  or  receive  any  fictitious  obligation,  directly  or 
collaterally,  in  order  to  evade  the  provisions  thereof,  or 
who  shall  certify  a  check  before  the  amount  thereof  shall 
have  been  regularly  entered  to  the  credit  of  the  drawer 
upon  the  books  of  the  bank,  shall  be  deemed  guilty  of  a 
misdemeanor  and  shall,  on  conviction  thereof  in  any  dis- 
trict court  of  the  United  States,  be  fined  not  more  than 
$5,000,  or  shall  be  imprisoned  for  not  more  than  five 
years,  or  both,  in  the  discretion  of  the  coui-t. 


REGULATION  OF  THE  BANKING  BUSINESS.  87 

PUNISHMENT  FOR  FALSELY  CERTIFYING  CHECKS.     ACT 
JULY  13,  1882. 

435.  Sec.  13.— 

Superseded  by  act  of  Sept.  26,  1918. 

PENALTY  FOR  EMBEZZLEMENT.  ABSTRACTION,  WILLFUL 
MISAPPLICATION,  FALSE  ENTRIES,  ETC. 

436.  Sec.  5209. — Any  officer,  director,  agent,  or  em-  Act  June  3, 
ployee  of  any  Federal  reserve  bank,  or  of  any  member  l^e^t  55 ;  ^^i^3 
bank  as  defined  in  the  act  of  December  twenty-third,  ^*\^^^  '^Xpr^^ 
nineteen  hundred  and  thirteen,  known  as  the  Federal  re-  isso,  c  iT;  le 
serve  act,  who  embezzles,  abstracts,  or  willfully  misap-  ^^Act^ jJiV  g, 
plies  anv  of  the  moneys,  funds,  or  credits  of  such  Federal  i«'^^'ei.^v  ^^t  ' 
reserve  biink  or  member  bank,  or  who,  without  authority  i95. 

from  the  directors  of  such  Federal  reserve  bank  or  mem- 1918*  ^^^*"  ^^' 
ber  bank,  issues  or  puts  in  circulation  any  of  the  notes 
of  such  Federal  reserve  bank  or  member  bank,  or  who, 
without  such  authority,  issues  or  puts  forth  any  certifi- 
cate of  deposit,  draws  any  order  or  bill  of  exchange, 
makes  any  acceptance,  assigns  any  note,  bond,  draft,  bill 
of  exchange,  mortgage,  judgment,  or  decree,  or  who 
makes  any  false  entry  in  any  book,  report,  or  statement  of 
such  Federal  reserve  bank  or  member  bank,  with  intent 
in  any  case  to  injure  or  defraud  such  Federal  reserve 
bank  or  member  bank,  or  any  other  company,  body  politic 
or  corporate,  or  any  individual  person,  or  to  deceive  any 
officer  of  such  Federal  reserve  bank  or  member  bank,  or 
the  Comptroller  of  the  Currency,  or  any  agent  or  exam- 
iner appointed  to  examine  the  affairs  of  such  Federal 
reserve  bank  or  member  bank,  or  the  Federal  Reserve 
Board ;  and  every  receiver  of  a  national  banking  associa- 
tion who,  with  like  intent  to  defraud  or  injure,  embezzles, 
abstracts,  purloins,  or  willfully  misapplies  any  of  the- 
moneys,  funds,  or  assets  of  his  trust,  and  every  person' 
who,  with  like  intent,  aids  or  abets  any  officer,  director, 
agent,  employee,  or  receiver  in  any  violation  of  this  sec- 
tion shall  be  deemed  guilty  of  a  misdemeanor,  and  upon 
conviction  thereof  in  any  district  court  of  the  United 
States  shall  be  fined  not  more  than  $5,000  or  shall  be 
imprisoned  for  not  more  than  five  years,  or  both,  in  the 
discretion  of  the  court. 

Any  Federal  reserve  agent,  or  any  agent  or  employee 
of  such  Federal  reserve  agent,  or  of  the  Federal  Eeserve 
Board,  who  embezzles,  abstracts,  or  willfully  misapplies 
any  moneys,  funds,  or  securities  intrusted  to  his  care,  or 
without  complying  with  or  in  violation  of  the  provisions 
of  the  Federal  reserve  act,  issues  or  put  in  circulation  any 
Federal  reserve  notes  shall  be  guilty  of  a  misdemeanor 
and  upon  conviction  in  any  district  court  of  the  United 
States  shall  be  fined  not  more  than  $5,000  or  imprisoned 
for  not  more  than  five  years,  or  both,  in  the  discretion 
of  the  court. 


88  REGULATION   OF  THE  BANKING  BUSINESS. 

NATIONAL  BANKS  NOT  PEKMITTED  TO  MAKE  CONTRIBIJ. 
TIONS  IN  CONNECTION  >VITH  ELECTION  TO  POLITICAL 
OFFICE.     ACT  JANUARY  26,  1907. 

Act  Jan.  26,  437.  That  it  shall  be  unlawful  for  any  national  bank,  or 
L?.^8^4f^  ^***'  i^ny  corporation  organized  by  authority  of  any  laws  of 
Congress,  to  make  a  money  contribution  in  connection 
with  any  election  to  any  political  office.  It  shall  also  be 
unlawful  for  any  corporation  whatever  to  make  a  money 
contribution  in  connection  with  any  election  at  which 
Presidential  and  Vice-Presidential  electors  or  a  Eepre- 
sentative  in  Congress  is  to  be  voted  for  or  any  election  by 
any  State  legislature  of  a  United  States  Senator.  Every 
corporation  which  shall  make  any  contribution  in  viola- 
tion of  the  foregoing  provisions  shall  be  subject  to  a  fin© 
not  exceeding  five  thousand  dollars,  and  every,  officer  or 
director  of  any  corporation  who  shall  consent  to  any  con- 
tribution by  the  corporation  in  violation  of  the  foregoing 
provisions  shall  upon  conviction  be  punished  by  a  fine  of 
not  exceeding  one  thousand  and  not  less  than  two  hun- 
dred and  fifty  dollars,  or  by  imprisonment  for  a  term  of 
not  more  than  one  year,  or  both  such  fine  and  imprison- 
ment in  the  discretion  of  the  court. 

MEMBER  BANK  CAN  NOT  MAKE  LOAN  OR  GRANT  A  GRA- 
TUITY  TO  ANY  NATIONAL  BANK  EXAMINER. 

Act  Dec.  23,  438a.  No  member  bank  and  no  officer,  director,  or  em- 
38  Stat!'  L.jployee  thereof  shall  hereafter  make  any  loan  or  grant 
^'^aW  T„r,„  oi  anv  gratuitv  to  anv  bank  examiner.     Anv  bank  officer, 

1917,  sec.  n.   director,  or  employee  violating  this  provision  shall  be 

1918.  ^^^'  ^^'  deemed  guilty  of  a  misdemeanor  and  shall  be  impris- 

oned not  exceeding  one  year  or  fined  not  more  than 
$5,000,  or  both;  and  may  be  fined  a  further  sum  equal 
to  the  money  so  loaned  or  gratuity  given. 

Any  examiner  accepting  a  loan  or  gratuity  from  any 
bank  examined  by  him  or  from  an  officer,  director,  or 
employee  thereof  shall  be  deemed  guilty  of  a  misde- 
meanor and  shall  be  imprisoned  one  year  or  fined  not 
more  than  $5,000,  or  both,  and  may  be  fined  a  further 
sum  equal  to  the  money  so  loaned  or  gratuity  given,  and 
shall  forever  thereafter  be  disqualified  from  holding  office 
as  a  national  bank  examiner. 

NATIONAL  BANK  EXAMINER  CAN  NOT  PERFORM  ANT 
SERTICE  FOR  COMPENSATION  FOR  ANY  BANK  OR  OF- 
FICER. EXAMINER  CAN  NOT  DISCLOSE  THE  NAMES 
OF  BORROWERS  OR  COLLATERAL  WITHOUT  FIRST 
OBTAINING  WRITTEN  CONSENT  OF  COMPTROLLER. 

19^3*  ^^^'  2^'  ^38b.  No  national  bank  examiner  shall  perform  any 
38  staV  L.]  other  service  for  compensation  while  holding  such  office 
^'^Act  June  21,  ^^r  any  bank  or  officer,  director,  or  employee  thereof. 
191^'^.  sec.  11  '  No  examiner,  public  or  private,  shall  disclose  the 
1918.  ^^  ■  '  names  of  borrowers  or  the  collateral  for  loans  of  a  mem- 
ber bank  to  other  than  the  proper  officers  of  such  bank 


REGULATION   OF  THE  BANKING  BUSINESS.  89 

■without  first  havino;  obtained  the  express  pennission  in 
Tvritinfj;  from  the  Comptroller  of  the  Currency,  or  from 
the  board  of  directors  of  such  bank,  except  when  ordered 
to  do  so  by  a  court  of  competent  jurisdiction,  or  by  direc- 
tion of  the  Congress  of  the  United  States,  or  of  either 
House  thereof,  or  am-  committee  of  Congi-ess,  or  of  either 
House  duly  authorized.  Any  bank  examiner  violating  the 
provisions  of  this  subsection  shall  be  imprisoned  not 
more  than  one  j'ear  or  fined  not  more  than  $5,000,  or 
both. 

PENALTY  FOR  OFFICER.  DIRECTOR.  OR  EilPIOTEE  OF 
MEMBER  BANK  WHO  RECEITES  ANY  COMMISSION  OR. 
GIFT  IN  CONNECTION  WITH  ANY  LOAN. 

438c.  Except  as  herein  provided,  any  officer,  director,  19^3*  ^^-  ^h 
employee,  or  attorney  of  a  member  bank  who  stipulates  38^  'stat.'    £.', 
for  or  receives  or  consents  or  agrees  to  receive  any  fee,    'ict  June  21, 
commission,  gift,  or  thing  of  value  from  any  person,  ^^^^;.  H^j. -^26 
firm,  or  corporation,  for  procuring  or  endeavoring  to  pro-  I9i8. 
cure  for  such  person,  firm,  or  corporation,  or  for  any 
other  person,  firm,  or  corporation,  an}'  loan  from  or  the 
purchase  or  discount  of  any  paper,  note,  draft,  check,  or 
bill  of  exchange  by  such  member  bank  shall  be  deemed 
guilty  of  a  misdemeanor  and  shall  be  imprisoned  not 
more  than  one  year  or  fined  not  more  than  $5,000,  or 
both. 

PURCHASE  OF  SECURITIES  OR  PROPERTY  FROM  ONE  OF 
ITS  DIRECTORS,  OR  SALES  TO  A  DIRECTOR  BY  A  MEM- 
BER BANK. 

438d.  Any  member  bank  may  contract  for,  or  purchase  ^g^^*  '^^-  ^^'. 
from,  any  of  its  directors  or  from  any  firm  of  which  any  ss    'stat.'  "u, 
of  its  directors  is  a  member,  any  securities  or  other  prop-  ^^ict  June  21, 
erty,  when  (and  not  otherwise)  such  purchase  is  made  in  ^^^^-^  lept^le 
the  regular  course  of  business  upon  terms  not  less  favor-  I9i8. 
able  to  the  bank  than  those  offered  to  others,  or  when 
such  purchase  is  authorized  by  a  majority  of  the  board 
of  directors  not  interested  in  the  sale  of  such  securities 
or  property,  such  authority  to  be  evidenced  by  the  af- 
firmative vote  or  written  assent  of  such  directors:  Pro- 
vided,  however,  That   when   any   director,   or   firm   of 
which  any  director  is  a  member,  acting  for  or  on  behalf 
of  others,  sells  securities  or  other  property  to  a  member 
bank,  the  Federal  Reserve  Board  by  regulation  may,  in 
any  or  all  cases,  require  a  full  disclosure  to  be  made,  on 
forms  to  be  prescribed  by  it,  of  all  commissions  or  other 
considerations  received,  and  whenever  such  director  or 
firm,  acting  in  his  or  its  own  behalf,  sells  securities  or 
other  property  to  the  bank  the  Federal  Reserve  Board, 
by  regulation,  may  require  a  full  disclosure  of  all  profit 
realized  from  sucli  sale. 

Any  member  bank  may  sell  securities  or  other  prop- 
erty to  any  of  its  directoi*s,  or  to  a  firm  of  wliich  any  of 


90  REGULATION   OF  THE  BANKING  BUSINESS. 

its  directors  is  a  member,  in  the  regular  course  of  busi- 
ness on  terms  not  more  favorable  to  such  director  or  firm 
than  those  offered  to  others,  or  when  such  sale  is  author- 
ized by  a  majority  of  the  board  of  directors  of  a  member 
bank  to  be  evidenced  by  their  affirmative  vote  or  written 
assent:  Provided^  however^  That  nothing  in  this  subsec- 
tion contained  shall  be  construed  as  authorizing  member 
banks  to  purchase  or  sell  securities  or  other  property 
which  such  banks  are  not  otherwise  authorized  by  law  to 
purchase  or  sell. 

RATE  OF  INTEREST  PAID  DIRECTORS,  OFFICERS,  OR 
EMPLOYEES  NOT  TO  EXCEED  THAT  PAID  TO  OTHER 
DEPOSITORS. 

i9iV*  fee'  2^2^'     438e.  No  member  bank  shall  pay  to  any  director,  officer, 

38^  Stat."    L.|  attorney,  or  employee  a  greater  rate  of  interest  on  the 

Act  June  21,  deposits  of  such  director,  officer,  attorney,  or  employee 

"^^Ac't  Sept  "^26  *^^^^  ^^^^  P^^^^  ^^  other  depositors  on  similar  deposits 
1918.  '  with  such  member  bank. 

PENALTY  FOR  VIOLATION  OF  ANY  OF  THE  PROVISIONS 
OF  SECTION  22  OF  THE  FEDERAL  RESERVE  ACT. 

1913*  sec!^"  2^2^'  4:38f .  If  the  directors  or  officers  of  any  member  bank 
Ifo  '®***'  ^•'  shall  knowingly  violate  or  permit  any  of  the  agents,  offi- 
Act  June  21.  cers,  or  directors  of  any  member  bank  to  violate  any  of 
"^^Act  Sept  ^26  ^^^  provisions  of  this  section  or  regulations  of  the  board 
1918.  '  made  under  authority  thereof,  every  director  and  officer 

Participating  in  or  assenting  to  such  violation  shall  be 
eld  liable  in  his  personal  and  individual  capacity  for  all 
damages  which  the  member  bank,  its  shareholders,  or 
any  other  persons  shall  have  sustained  in  consequence  of 
such  violation. 

LIST  OF  SHAREHOLDERS. 

1864*.  c!""  106'  439.  Sec.  5210.— The  president  and  cashier  of  every 
Stat'  L^^'ii/^ii^tional  banking  association  shall  cause  to  be  kept  at  all 
times  a  full  and  correct  list  of  the  names  and  residences 
of  all  the  shareholders  in  the  association,  and  the  number 
of  shares  held  by  each,  in  the  office  where  its  business  is 
transacted.  Such  list  shall  be  subject  to  the  inspection 
of  all  the  shareholders  and  creditors  of  the  association, 
and  the  officers  authorized  to  assess  taxes  under  State 
authority,  during  business  hours  of  each  day  in  which 
business  may  be  legally  transacted.  A  copy  of  such  list, 
on  the  first  Monday  of  July  of  each  year,  verified  by  the 
•    •  oath  of  such  president  or  cashier,  shall  be  transmitted  to 

the  Comptroller  of  the  Currency. 

REPORTS  TO  COMPTROLLER  OF  THE  CURRENCY. 

1864*  c"°\o6'  ^^^-  ^^^-  ^^^^  [^^  amended  1877].— Every  association 
s  L'  c'  34 ;  li  shall  make  to  the  Comptroller  of  the  Currency  not  less 
Stat.  L..  109.    ^Qj^  gyg  reports  during  each  year,  according  to  the  form 


REGULATION   OF   THE   BANKING  BUSINESS.  91 

which  may  be  prescribed  by  him,  verified  by  the  oath  or  ^g^^*  a^'^iso! 
affirmation  of  the  president  or  cashier  of  such  association,  «ec.  i ;  I's  stat! 
and  attested  by  the  signature  of  at  least  three  of  the    Act  Feb.  27. 
directors.    Each  such  report  shall  exhibit,  in  detail  and  HH'  £;  ^25'2.'^ 
under  appropriate  heads,  the  resources  and  liabilities  of 
the  association  at  the  close  of  business  on  any  past  day  by 
him  specified ;  and  shall  be  transmitted  to  the  Comptrol- 
ler within  five  days  after  the  receipt  of  a  request  or  requi- 
sition therefor  from  him,  and  in  the  same  form  in  which 
it  is  made  to  the  Comptroller  shall  be  published  in  a 
newspaper  published  in  the  place  where  such  association 
is  established,  or  if  there  is  no  newspaper  in  the  place, 
then  in  the  one  published  nearest  thereto  in  the  same 
county,  at  the  expense  of  the  association ;  and  such  proof 
of  publication  shall  be  furnished  as  may  be  required  by 
the  Comptroller.    The  Comptroller  shall  also  have  power 
to  call  for  special  reports  from  any  particular  association 
whenever  in  his  judgment  the  same   are   necessary  in 
order  to  a  full  and  complete  Imowledge  of  its  condition. 

Note. — Section  713  of  the  Code  of  Laws  of  the  District  of  Colum- 
bia provides :  "  That  all  publications  authorized  or  required  by 
said  section  fifty-two  hundred  and  eleven  of  the  Revised  Statutes, 
and  all  other  publications  authorized  or  required  by  listing  law 
to  be  made  in  the  District  of  Columbia,  shall  be  printed  in  two 
or  more  daily  newspapers  of  general  circulation,  published  in  the 
City  of  Washington,  one  of  which  shall  be  a  morning  newspaper." 

The  Federal  Reserve  Board  is  authorized  by  section  11  of  the 
Federal  reserve  act  to  examine  at  its  discretion  the  accounts, 
books,  and  affairs  of  each  Federal  reserve  bank  and  of  each  mem- 
ber bank  and  to  require  such  statements  and  reports  as  It  may 
deem  necessary. 

VERIFICATION  OF  REPORTS.     ACT  FEBRUARY  26,  1881. 

441.  That  the  oath  or  affirmation  required  by  section  ^8fj*^*^,^|^-.^2^i' 
fifty-two  hundred  and  eleven  of  the  Revised  Statutes,  Btat,'  l.,  352. 
verifying  the  returns  made  by  national  banks  to  the 
Comptroller  of  the  Currency,  when  taken  before  a  notary 

public  properly  authorized  and  commissioned  by  the 
State  in  which  such  notary  resides  and  the  bank  is  lo- 
cated, or  any  other  officer  having  an  official  seal,  author- 
ized in  such  State  to  administer  oaths,  shall  be  a  sufficient 
verification  as  contemplated  by  said  section  fifty-two  hun- 
dred and  eleven :  Provided,  That  the  officer  administering 
the  oath  is  not  an  officer  of  the  bank. 

REPORT  OF  DIVIDENDS. 

442.  Sec.  5212. — In  addition  to  the  reports  required  by  iggg*  ^^""i.^o! 
the  preceding  section,  each  association  shall  report  to  the  l^'^-|.,v^^  ^*"*' 
Comptroller  of  the  Currency,  within  ten  days  after  de-     ' 
daring  any  dividend,  the  amount  of  such  dividend,  and 

the  amount  of  net  earnings  in  excess  of  such  dividend. 
Such  reports  shall  be  attested  by  the  oath  of  the  president 
or  cashier  of  the  association. 


92  REGULATION   OF  THE  BANKING  BUSINESS. 

PENALTY  FOR  FAILURE  TO  MAKE  REPORTS. 

Act  Mar.  3,  443.  Sec.  5213. — Every  association  which  fails  to  make 
sees.'  h'2 :  id  and  transmit  any  report  required  under  either  of  the  two 
Stat.  L.,  326.  preceding  sections  shall  be  subject  to  a  penalty  of  one 
hundred  dollars  for  each  day  after  the  periods,  respec- 
tively, therein  mentioned,  that  it  delays  to  make  and 
transmit  its  report.  Whenever  any  association  delays  or 
refuses  to  pay  the  penalty  herein  imposed,  after  it  has 
been  assessed  by  the  Comptroller  of  the  Currency,  the 
amount  thereof  may  be  retained  by  the  Treasurer  of  the 
United  States,  upon  the  order  of  the  Comptroller  of  the 
Currency,  out  of  the  interest,  as  it  may  become  due  to  the 
association,  on  the  bonds  dejDosited  with  him  to  secure 
circulation.  All  sums  of  money  collected  for  penalties 
under  this  section  shall  be  paid  into  the  Treasury  of  the 
United  States. 

TAXES  PAYABLE  TO  THE  UNITED  STATES. 

Sec.  5214,  u.     444.  Scc.  5214. — In  lieu  of  all  existino-  taxes,  every  asso- 
Act  June  3,  ciation  shall  pay  to  the  Treasurer  of  the  United  States, 
s  e^c '   41  •  ^^li  ^^  ^^^®  mj^nths  of  January   and  July,   a  duty  of  one- 
stat'.  L.,  111.    half  of  one  per  centum  each  half  year  upon  the  average 
amount  of  its  notes  in  circulation,  [and  a  duty  of  one- 
quarter  of  one  per  centum  each  half  year  upon  the  aver- 
age amownt  of  its  deposits,  and  a  duty  of  one-quarter  of 
one  per  centum,  each  half  year  on  the  average  amount  of 
its  capital  stock,  heyond  the  amount  invested  in  United 
States  hands']. 

1900*  ^c'^'  it-  ^^^'  ^^^'  ^^' — That  every  national  banking  association 
31  Stat.  L.,  49.  having  on  deposit,  as  provided  by  law,  bonds  of  the 
United  States  bearing  interest  at  the  rate  of  two  per 
centum  per  annum,  issued  under  the  provisions  of  this 
Act,  to  secure  its  circulating  notes,  shall  pay  to  the 
Treasurer  of  the  United  States,  in  the  months  of  Janu- 
ar}^  and  July,  a  tax  of  one-fourth  of  one  per  centum 
each  half  year  upon  the  average  amount  of  such  of  its 
notes  in  circulation  as  are  based  upon  the  deposit  of  said 
two  per  centum  bonds;  and  such  taxes  shall  be  in  lieu 
of  existing  taxes  on  its  notes  in  circulation  imposed  by 
section  fifty-two  hundred  and  fourteen  of  the  Revised 
Statutes. 

Note. — The  provisions  of  section  5214,  covering  taxes  on  the 
average  amount  of  deposits  and  capital,  were  repealed  by  the  act 
of  March  3,  1SS3.  The  2  per  cent  Panama  Canal  bonds  were 
given  all  rights  and  privileges  accorded  to  other  2  per  cent  bonds 
of  the  United  States  by  the  act  of  December  21,  1905. 

On  May  30,  1908,  section  5214  was  reenacted  so  as  to  cover 
the  provisions  of  the  original  section  as  modified  by  the  acts 
of  March  3,  1883,  March  14,  1900,  and  December  21,  1905.  and  in 
addition  thereto  there  was  added  provisions  for  the  taxation  of 
the  additional  circulation  issued  under  the  act.  The  act  of  May 
30,  1908,  however,  expired  on  June  30,  1914,  and  while  it  was  ex- 
tended by  section  27  of  the  act  of  December  23,  1913,  to  June 
30,  1915,  it  was  expressly  provided  in  the  latter  act  that  on  the 


REGULATION"  OF  THE  BAISTKING  BUSINESS.  93 

expiration  of  the  act  of  May  30,  1908,  section  5214  should  be  re- 
enacted  to  read  as  such  section  read  prior  to  l\Iay  30, 190S.  The  acts 
of  December  23,  1913,  and  Aufrust  4,  1914.  amended  the  provisions 
In  this  section  of  the  act  of  May  30,  1908,  relative  to  the  taxa- 
tion of  emergency  currency.  All  the  provisions  for  the  emer- 
gency currency  expired  on  June  30,  1915. 

The  following  is  section  5214  as  it  stood  prior  to  the  expiration 
of  the  Emergency  Currency  Act  on  June  30,  1915,  with  all  amend- 
ments : 

"  Sec.  5214.  National  banking  associations  having  on  deposit 
bonds  of  the  United  States,  bearing  interest  at  the  rate  of  two 
per  centum  per  annum,  including  the  bonds  issued  for  the  con- 
struction of  the  Panama  Canal,  under  the  provisions  of  .section 
eight  of  'An  Act  to  provide  for  the  construction  of  a  canal  con- 
necting the  waters  of  the  Atlantic  and  Pacific  oceans.'  approved 
June  twenty-eighth,  nineteen  hundred  and  two,  to  secure  its 
circulating  notes,  shall  pay  to  the  Treasury  of  the  Unitetl  States, 
in  the  months  of  January  and  July,  a  tax  of  one-fourth  of  one 
per  centum  each  half  year  upon  the  average  amount  of  such  of  its 
notes  in  circulation  as  are  based  upon  the  deposit  of  such  bonds; 
and  such  associations  having  on  deposit  bonds  of  the  United 
States  bearing  interest  at  a  rate  higher  than  two  per  centum 
per  annum  shall  pay  a  tax  of  one-half  of  one  per  centum  each 
half  year  upon  the  average  amount  of  such  of  its  notes  in  circula- 
tion as  are  based  upon  the  deposit  of  such  bonds. 

"  National  banking  associations  having  circulating  notes  secured 
otherwise  than  by  bonds  of  the  United  States,  shall  pay  for  the 
first  three  months  a  tax  at  the  rate  of  three  per  centum  per  annum 
upon  the  average  amount  of  such  of  their  notes  in  circulation  as 
are  based  upon  the  deposit  of  such  securities,  and  afterwards  an 
additional  tax  rate  of  one-half  of  one  per  centum  per  annum  for 
each  month  until  a  tax  of  six  per  centum  per  annum  is  reached, 
and  thereafter  such  tax  of  six  per  centum  per  annum  upon  the 
average  amount  of  such  notes.  Every  national  banking  associa- 
tion having  outstanding  circulating  notes  secured  by  a  deposit  of 
other  securities  than  United  States  bonds  shall  make  monthly 
returns,  under  oath  of  its  president  or  cashier,  to  the  Treasurer 
of  the  United  States,  in  such  form  as  the  Treasurer  may  prescribe, 
of  the  average  monthly  amount  of  its  notes  so  secured  in  circula- 
tion ;  and  it  shall  be  the  duty  of  the  Comptroller  of  the  Currency 
to  cause  such  reports  of  notes  in  circulation  to  be  verified  by 
examination  of  the  bank's  records.  The  taxes  received  on  circu- 
lating notes  secured  otherwise  than  by  bonds  of  the  United  States 
shall  be  paid  into  the  Division  of  Redemption  of  the  Treasury  and 
credited  and  added  to  the  reserve  fund  held  for  the  redemption  of 
United  States  and  other  notes." 

HALF-YEARLY    RETURN   OF    CIRCULATION    [deposits   and 
capital  stock]. 

446.  Sec.  5215. — In  order  to  enable  the  Treasurer  to     Act  J^ne  3, 
assess  the  duties  imposed  by  the  preceding  section,  each  sec'   41;    is 
association  shall,  within  ten  days  from  the  first  days  of  ^*^^"  ^"  ^^^' 
January  and  July  of  each  year,  make  a  return,  under  the 
oath  of  its  president  or  cashier,  to  the  Treasurer  of  the 
United  States,  in  such  form  as  the  Treasurer  may  pre- 
scribe, of  the  average  amount  of  its  notes  in  circulation, 
[aiid  of  the  average  ammint  of  its  deposits.,  and  of  the 
average  amount  of  its  capital  stock,  heyond  the  amount 
invested  in  United  States  bonds],  for  the  six  months  next 
preceding  the  most  recent  first  day  of  January  or  July. 
Every  association  which  fails  so  to  make  such  return 
shall  be  liable  to  a  penalty  of  two  hundred  dollars,  to  be 


94  REGUL-ATION   OF  THE  BANKIISTG  BUSINESS. 

collected  either  out  of  the  interest  as  it  may  become  due 
such  association  on  the  bonds  deposited  with  the  Treas- 
urer, or,  at  his  option,  in  the  manner  in  which  penalties 
are  to  be  collected  of  other  corporations  under  the  laws 
of  the  United  States. 

Note. — The  taxes  on  the  average  amount  of  deposits  and  capital 
stock  were  repealed  by  the  act  of  March  3,  1883. 

PENALTY  FOR  FAILURE  TO  MAKE  RETURN. 

Act  June  3,  447.  Scc.  5216. — Whenever  any  association  fails  to  make 
ITc.'  4i ;  ^^li  the  half-yearly  return  required  by  the  preceding  section, , 
Stat.  L.,  ill.  the  duties  to  be  paid  by  such  association  shall  be  assessed 
upon  the  amount  of  notes  delivered  to  such  association 
by  the  Comptroller  of  the  Currency,  [and  upon  the  high- 
est amount  of  its  deposits  and  capital  stocky  to  he  asceV' 
tained  in  such  Tnanner  as  the  Treasurer  may  deem  hest.'] 

Note. — See  note  under  section  5215  stating  that  tax  on  deposits 
and  capital  stock  had  been  repealed. 

ENFORCING  TAX  ON  CIRCULATION. 

Act  .Tune  3,  448.  Scc.  5217. — Whenever  an  association  fails  to  pay 
s  e^c.'  41 ;  ^^1^^  the  duties  imposed  by  the  three  preceding  sections,  the 
Stat.  L.,  111.  sums  due  may  be  collected  in  the  manner  provided  for  the 
collection  of  United  States  taxes  from  other  corpora- 
tions ;  or  the  Treasurer  may  reserve  the  amount  out  of  the 
interest,  as  it  may  become  due,  on  the  bonds  deposited 
with  him  by  such  defaulting  association. 

REFUNDING  EXCESS  TAX. 

Resolution      449.  Scc.  5218. — In  all  cases  where  an  association  has 
No. '  49;  __i^  paid  or  may  pay  in  excess  of  what  may  be  or  has  been 
as^ainendpd  'in  lound  due  f  rom  it,  on  account  of  the  duty  required  to  be 
R.  s.  5218.       paid  to  the  Treasurer  of  the  United  States,  the  associa- 
tion may  state  an  account  therefor,  which,  on  being  certi- 
fied by  the  Treasurer  of  the  United  States,  and  found 
correct  by  the  First  Comptroller  of  the  Treasury,  shall 
be  refunded  in  the  ordinary  manner  by  warrant  on  the 
Treasury. 

NO  TAX  TO  BE  PAID  BY  INSOLVENT  BANKS.  ACT  MARCH 

1,  1879. 

nJe  *^a""'  mIf'  ^^^"  ^^^'  ^^' — ^^^^  whenever  and  after  any  bank  has 
1,  i87!>,  sec!  ceased  to  do  business  by  reason  of  insolvency  or  bank- 
22  j^  20  Stat.  L.,  ruptcy,  no  tax  shall  be  a.ssessed  or  collected,  or  paid  into 
the  Treasury  of  the  United  States,  on  account  of  such 
bank,  which  shall  diminish  the  assets  thereof  necessary 
for  the  full  payment  of  all  its  depositors;  and  such  tax 
shall  be  abated  from  such  national  banks  as  are  found  by 
the  Comptroller  of  the  Currency  to  be  insolvent;  *  *  •. 


REGtJLATION   OF  THE   BANKING  BUSINESS.  95 

STATE  TAXATION. 

451.  Sec.  5219.— Nothing  herein  shall  prevent  all  the  ^^^^J  J"°io6* 
shares  in  any  association  from  being  included  in  the  valu-  sec'  4i;    li 
ation  of  the  personal  property  of  the  owner  or  holder  of  '  let.  iVb.  io, 
such  shares,  in  assessing  taxes  imposed  by  authority  of  ^f^^;  j^;^  ^4  ^^ 
the  State  within  which  the  association  is  located;  but  the 
legishiture  of  each  State  may  determine  and  direct  the 
manner  and  place  of  taxing  all  the  shares  of  national 
banking  associations  located   within  the   State,   subject 
only  to  the  two  restrictions,  that  the  taxation  shall  not  be 
at  a  greater  rate  than  is  assessed  upon  other  moneyed 
capital  in  the  hands  of  individual  citizens  of  such  State, 
and  that  the  shares  of  any  national  banking  association 
owned  by  nonresidents  of  any  State  shall  be  taxed  in  the 
city  or  town  where  the  bank  is  located,  and  not  elsewhere. 
Nothing  herein  shall  be  construed  to  exempt  the  real 
property  of  associations  from  either  State,  county,  or  mii- 
nicipal  taxes,  to  the  same  extent,  according  to  its  value, 
as  other  real  property  is  taxed. 


DISSOLUTION  AND  RECEIVERSHIP. 


164312°— 20 7  97 


CHAPTER  V. 


DISSOLUTION    AND    RECEIVERSHIP. 


500.  5220.  Two-thirds     vote     required 

for  liquidation. 

501.  5221.  Notice    of   voluntary    liqui- 

dation. 

502.  5222.  Deposit  of  lawful  money  to 

redeem   circulation. 

503.  5223.  No     deposit     required     for 

consolidation. 
503a.  Act  November  7,  1918.     Consoli- 
dation of  national  banks. 

504.  5224.  Reassignment  of  bonds  and 

redemption  of  notes  of 
liquidating  banks. 

505.  Act    June    20,     1874.       Duty     of 

Treasurer,  Assistant 
Treasurer,  etc.,  to  return 
notes  of  failed  or  liquidat- 
ing banks  to  Treasury  for 
redemption. 

506.  5225.  Destruction     of     redeemed 

notes. 

507.  5226.  Protest  of  bank  circulation. 

508.  5227.  Bonds   forfeited   if  circula- 

tion is  dishonored.  Ex- 
amination  by  special 
agent. 

509.  5228.  Suspension       of       business 

after  default. 

510.  5229.  Notice    to    present    circula- 

tion for  redemption. 
Cancellation   of  bonds. 

511.  5230.  Sale   of   bonds   at   auction. 

First  lien  for  redeeming 
circulation. 

512.  5231.  Bonds  may  be  sold  at  pri- 

vate sale. 

513.  5232.  Disposal     of     redeemed 

notes.  Regulations  for 
redemption  records. 


514.  5233.  Redeemed  notes  to  be  can- 

celed. 

515.  5234.  Appointment  and  duties  of 

receivers. 

516.  5235.  Notice    to    creditors    of    in- 

solvent banks  to  present 
claims. 

517.  5236.  Dividends.     Distribution  of 

assets  of  insolvent  banks. 

518.  5237.  When  bank  may  enjoin  fur- 

ther proceedings. 

519.  5238.  Fees  and  expenses. 

520.  Act    June    30,    1876.      When    re- 

ceiver may  be  appointed. 

521.  Act    June    30,    1876.      Creditor's 

bill  against  shareholders. 

522.  Act    June   30,    1876,    as    amended 

1892.  1897.  Appoint- 
ment, qualification,  and 
duties  of  shareholders' 
agent. 

523.  Act    March    29,    1886.      Receiver 

may  purchase  property  to 
protect  his  tru^t. 

524.  Act  March  29,  1886.     Approval  of 

request. 

525.  Act  March  29,  1886.     Payment. 

526.  5239.  Penalty     for     violation     of 

this  title.  Forfeiture  of 
charter.  Individual  lia- 
bility of  directors. 

527.  5240.  Appointment  of  examiners. 

Compensation. 

528.  5241.  Limitation       of      visitorial 

powers. 

529.  5242.  Transfers,    when    void.     Il- 

legal prefei-ence  of  credi- 
tors. 

530.  5243.  Use     of     the     title     "Na- 

tional." 


TWO-THIRDS  VOTE  REQUIRED  FOR  LIQUIDATION. 

500.  Sec.  5220.— Any  association  may  go  into  liqnida-  ^^^^^  i^°\ol\ 
tion  and  be  closed  by  the  vote  of  its  shareholders  o^^i^g|'iat'L"ii2^^ 
two-thirds  of  its  stock. 

Note. — For  enforcement  of  shareholders'  liability  when  bank  is 
in  liquidation  see  act  of  June  30,  1876,  following  Revised  Statutes, 
5238. 


NOTICE  OF  VOLUNTARY  LIQUIDATION. 

501.  Sec.  5221. — AVhenever  a  vote  is  taken  to  go  into  1 864,  c.""%6! 
liquidation  it  shall  be  the  duty  of  the  board  of  directors  1^^^^  j'^-=„p^ 
to  cause  notice  of  this  fact  to  be  certified,  under  the  seal 


an 


100  DISSOLUTION   AND  KECEIVEESHIP. 

of  the  association,  by  its  president  or  cashier,  to  the 
Comptroller  of  the  Currency,  and  publication  thereof  to 
be  made  for  a  period  of  two  months  in  a  newspaper  pub- 
lished in  the  city  of  New  York,  and  also  in  a  newspaper 
published  in  the  city  or  town  in  which  the  association  is 
located,  or  if  no  newspaper  is  there  published,  then  in  the 
newspaper  published  nearest  thereto,  that  the  association 
is  closing  up  its  affairs,  and  notifying  the  holders  of  its 
notes  and  other  creditors  to  present  the  notes  and  other 
claims  against  the  association  for  payment. 

DEPOSIT  OF  LAWFUL  MONET  TO  REDEEM  CIRCULATION. 

Act  June  3.     502.  Sec.  5222. — Within  six  months  from  the  date  of 

sec^s*'  42,  ■43^1  the  vote  to  go  into  liquidation,  the  association  shall  de- 

13^  Stat.     L-.  posit  with  the  Treasurer  of  the  United  States,  lawful 

Act  July  14,  money  of  the  United  States  sufficient  to  redeem  all  its 

ifi^^'stat.  '^L.',  outstanding  circulation.     The  Treasurer   shall  execute 

2'^-*-  duplicate  receipts  for  money  thus  desposited  and  deliver 

one  to  the  association  and  the  other  to  the  Comptroller  of 

the  Currency,  stating  the  amount  received  by  him,  and  the 

purpose  for  which  it  has  been  received;  and  the  money 

shall  be  paid  into  the  Treasury  of  the  United  States,  and 

placed  to  the  credit  of  such  association  upon  redemption 

account. 

NO  DEPOSIT  REQUIRED  FOR  CONSOLIDATION. 

1870*  c"^^26¥'  .^^^'  ^^^-  5223.— An  association  which  is  in  good  faith 
16  Stat.  L.',  winding  up  its  business  for  the  purpose  of  consolidating 
^^*"  with  another  association  shall  not  be  required  to  deposit 

lawful  money  for  its  outstanding  circulation;  but  its  as- 
sets and  liabilities  shall  be  reported  by  the  association 
with  which  it  is  in  process  of  consolidation. 

CONSOLIDATION  OF  NATIONAL  BANKS. 

1918.*  ^*^  ^'  503a. — That  any  two  or  more  national  banking  associa- 
tions located  within  the  same  county,  city,  town,  or  village 
may,  with  the  approval  of  the  Comptroller  of  the  Cur- 
rency, consolidate  into  one  association  under  the  charter 
of  either  existing  banks,  on  such  terms  and  conditions  as 
may  be  lawfully  agreed  upon  by  a  majority  of  the  board 
of  directors  of  each  association  proposing  to  consolidate, 
and  be  ratified  and  confirmed  by  the  affirmative  vote  of 
the  shareholders  of  each  such  association  owning  at  least 
two-thirds  of  its  capital  stock  outstanding,  at  a  meeting 
to  be  held  on  the  call  of  the  directors  after  publishing 
notice  of  the  time,  place,  and  object  of  the  meeting  for 
four  consecutive  weeks  in  some  newspaper  published  in 
the  place  where  the  said  association  is  located,  and  if  no 
newspaper  is  published  in  the  place,  then  in  a  paper 
published  nearest  thereto,  and  after  sending  such  notice  to 
each  shareholder  of  record  by  registered  mail  at  least  ten 
days  prior  to  said  meeting :  Provided,  That  the  capital 
stock  of  such  consolidated  association  shall  not  be  less 


DISSOLUnON   AND  RECEIVERSHIP.  101 

than  that  required  under  existing  law  for  the  organization 
of  a  national  bank  in  the  place  in  which  it  is  located: 
And  provided  further^  That  when  such  consolidation 
shall  have  been  effected  and  approved  by  the  comptroller 
any  shareholder  of  either  of  the  associations  so  consoli- 
dated who  has  not  voted  for  such  consolidation  may  give 
notice  to  the  directors  of  the  association  in  which  he  is 
interested  within  twenty  days  from  the  date  of  the  cer- 
tificate of  approval  of  the  comptroller  that  he  dissents 
from  the  plan  of  consolidation  as  adopted  and  approved, 
whereupon  he  shall  be  entitled  to  receive  the  value  of  the 
shares  so  held  by  him,  to  be  ascertained  by  an  appraisal 
made  by  a  committee  of  three  persons,  one  to  be  selected 
by  the  shareholder,  one  by  the  directors,  and  the  third  by 
the  two  so  chosen ;  and  in  case  the  value  so  fixed  shall  not 
be  satisfactory  to  the  shareholder  he  may  within  five  days 
after  being  notified  of  the  appraisal  appeal  to  the  Comp- 
troller of  the  Currency,  who  shall  cause  a  reappraisal  to 
be  made,  which  shall  be  final  and  binding;  and  if  said 
reappraisal  shall  exceed  the  value  fixed  by  said  committee, 
the  bank  shall  pay  the  expenses  of  the  reappraisal ;  other- 
wise the  appellant  shall  pay  said  expenses,  and  the  value 
so  ascertained  and  determined  shall  be  deemed  to  be  a 
debt  due  and  be  forthwith  paid  to  said  shareholder  from 
said  bank,  and  the  share  so  paid  shall  be  surrendered  and 
after  due  notice  sold  at  public  auction  within  thirty  days 
after  the  final  appraisement  provided  for  in  this  Act. 

Sec.  2.  That  associations  consolidating  with  another 
association  under  the  provisions  of  this  Act  shall  not  be 
required  to  deposit  lawful  money  for  their  outstanding 
circulation,  but  their  assets  and  liabilities  shall  be  re- 
ported by  the  association  with  which  they  have  consoli- 
dated. And  all  the  rights,  franchises,  and  interests  of  the 
said  national  bank  so  consolidated  in  and  to  every  species 
of  property,  personal  and  mixed,  and  choses  in  action 
thereto  belonging,  shall  be  deemed  to  be  transferred  to 
and  vested  in  such  national  bank  into  which  it  is  con- 
solidated without  any  deed  or  other  transfer,  and  the 
said  consolidated  national  bank  shall  hold  and  enjoy  the 
same  and  all  rights  of  property,  franchises,  and  interests 
in  the  same  manner  and  to  the  same  extent  as  was  held 
and  enjoyed  by  the  national  bank  so  consolidated  there- 
with. 

REASSIGNMENT  OF  BONDS  AND  REDEMPTION  OF  NOTES 
OF  LIQUIDATING  BANKS. 

504.  Sec.  5224  [as  amended  1875]. — Whenever  a  suffi-  Act  June  ^, 
cient  deposit  of  lawful  money  to  redeem  the  outstanding s?c^.'  42;  ^Ts 
circulation  of  an  association  proposing  to  close  its  busi-  ^*\^(;f  ^ivb  ^is 
ncss  has  been  made,  the  bonds  deposited  by  the  associa- isVs. '  c.  so! 
tion  to  secure  payment  of  its  notes  shall  be  reassigned  to  320.  ^*'^''  ^" 
it,  in  the  manner  prescribed  by  section  fifty-one  hundred 
and  sixty-two.     And  thereafter  the  association  and  its 


102  DISSOLUTION   AND  RECEIVERSHIP. 

shareholders  shall  stand  discharged  from  all  liabilities 
upon  the  circulating  notes,  and  those  notes  shall  be  re- 
deemed at  the  Treasury  of  the  United  States.  And  if 
any  such  bank  shall  fail  to  make  the  deposit  and  take  up 
its  bonds  for  thirty  days  after  the  expiration  of  the  time 
specified,  the  Comptroller  of  the  Currency  shall  have 
power  to  sell  the  bonds  pledged  for  the  circulation  of 
said  bank,  at  public  auction  in  New  York  City,  and,  after 
providing  for  the  redemption  and  cancellation  of  said 
circulation  and  the  necessary  expenses  of  the  sale,  to 
pay  over  any  balance  remaining  to  the  bank  or  its  legal 
repress]  tatives. 

DUTY  OF  TREASURER,  ASSISTANT  TREASURERS,  ETC.,  TO 
RETURN  NOTES  OF  FAILED  OR  LIQUIDATING  BANKS  TO 
TREASURY  FOR  REDEMPTION.     ACT  JUNE  20,  1874. 

1874*  c"°^343;  505.  Sec.  8. — *  *  *  And  it  shall  be  the  duty  of  the 
L.^'  i^2h  ^^  ^*^**  J^  I'easurer,  assistant  treasurers,  designated  depositaries, 
and  national  bank  depositaries  of  the  United  States 
*  *  *  to  assort  and  return  to  the  Treasury  for  re- 
demption the  notes  of  such  national  banks  as  have  failed, 
or  gone  into  voluntary  liquidation  for  the  purpose  of 
winding  up  their  affairs,  and  of  such  as  shall  hereafter  so 
fail  or  go  into  liquidation. 

DESTRUCTION  OF  REDEEMED  NOTES. 

1864.*  ?°'i06:     506.  Sec.  5225  [as  amended  1877].— Whenever  the  Treas- 
st\t"  h.^112.^^^^^  ^^^^  redeemed  any  of  the  notes  of  an  association 
Act.  Feb.  27,  which  lias  conmienced  to  close  its  affairs  under  the  five 
Stat.'  L..  252.    preceding  sections,  he  shall  cause  the  notes  to  be  mu- 
tilated and  charged  to  the  redemption  account  of  the 
association;  and  all  notes  so  redeemed  by  the  Treasurer 
shall,  every  three  months,  be  certified  to  and  [bmmedl 
in  the  manner  prescribed  in  section  fifty-one  hundred  and 
eighty -four. 

Note. — See  act  of  June  23,  1874,  following  Revised  Statutes,  sec- 
tion 5184,  directing  that  bank  notes  be  macerated  and  not  burned. 

PROTEST  OF  BANK  CIRCULATION. 

507.  Sec.  5226. — Whenever  any  national  banking  asso- 
1864*  c"°%6'  ciation  fails  to  redeem  in  the  lawful  money  of  the  United 
8  0  0.'   46;    i:^  States  any  of  its  circulating  notes,  upon  demand  of  pay- 
stat.  L.,  113.    j^gj^^  j^jjy  made  during  the  usual  hours  of  business,  at  the 
office  of  such  association,  or  at  its  designated  place  of  re- 
demption, the  holder  may  cause  the  same  to  be  protested, 
in  one  package,  by  a  notary  public,  unless  the  president  or 
cashier  of  the  association  whose  notes  are  presented  for 
payment,  [or  the  president  or  cashier  of  the  association  at 
the  place  at  which  they  are  redeemahle']  offers  to  waive 
demand  and  notice  of  the  protest,  and,  in  pursuance  of 


DISSOLUTION   AND  RECEIVERSHIP.  103 

such  offer,  makes,  signs,  and  delivers  to  the  party  mak- 
ing such  demand  an  admission,  in  writing,  stating  the 
time  of  the  demand,  the  amount  demanded,  and  the  fact 
of  the  nonpayment  thereof.  The  notary  public,  on  mak- 
ing such  protest,  or  upon  receiving  such  admission,  shall 
forthwith  forward  such  admission  or  notice  of  protest  to 
the  Comptroller  of  the  Currency,  retaining  a  copy  there- 
of. If,  however,  satisfactory  proof  is  produced  to  the 
notary  public  that  the  payment  of  the  notes  demanded 
is  restrained  by  order  of  any  court  of  competent  juris- 
diction, he  shall  not  protest  the  same.  When  the  holder 
of  any  notes  causes  more  than  one  note  or  package  to 
be  protested  on  the  same  day,  he  shall  not  receive  pay 
for  more  than  one  protest. 

Note. — Circulation  redeemable  only  at  Treasury  or  over  own 
counter.  Designated  places  of  redemption  have  not  existed  since 
act  June  20,  1874.     (See  note  under  paragraph  401,  ante.) 

BONDS   FORFEITED    IF    CIRCULATION    IS    DISHONORED. 
EXAMINATION  BY  SPECIAL  AGENT. 

508.  Sec.  5227. — On  receiving  notice  that  any  national  jg^c*  June  ^3. 
banking  association  has  failed  to  redeem  any  of  its  circu-  s  e  c'   47 ;    1^ 
lating  notes,  as  specified  in  the  preceding  section,  the    ^*"     '  ^    * 
Comptroller  of  the  Currency,  with  the  concurrence  of  the 
Secretary  of  the  Treasury,  may  appoint  a  special  agent, 

of  whose  appointment  immediate  notice  shall  be  given  to 
such  association,  who  shall  immediately  proceed  to  ascer- 
tain whether  it  has  refused  to  pay  its  circulating  notes  in 
the  lawful  money  of  the  United  States,  when  demanded, 
and  shall  report  to  the  Comptroller  the  fact  so  ascer- 
tained. If,  from  such  protest,  and  the  report  so  made, 
the  Comptroller  is  satisfied  that  such  association  has  re- 
fused to  pay  its  circulating  notes  and  is  in  default,  he 
shall,  within  thirty  days  after  he  has  received  notice  of 
such  failure,  declare  the  bonds  deposited  by  such  associa- 
tion forfeited  to  the  United  States,  and  they  shall  there- 
upon be  so  forfeited. 

SUSPENSION  OF  BUSINESS  AFTER  DEFAULT. 

509.  Sec.  5228  [as  amended  1875].— After  a  default  on  jg^ct  June^s. 
the  part  of  an  association  to  pay  any  of  its  circulating  |ec.'  ^6;^ja 
notes  has  been  ascertained  by  the  Comptroller,  and  notice  ac?  '  Feb.  is, 
thereof  has  been  given  by  him  to  the  association,  it  shall  ^fjf;  L.,^32'0^^ 
not  be  lawful  for  the  association  suffering  the  same  to 

pay  out  any  of  its  notes,  discount  any  notes  or  bills,  or 
otherwise  prosecute  the  business  of  banking,  except  to 
receive  and  safely  keep  money  belonging  to  it,  and  to 
deliver  special  deposits. 


104  DISSOLUTION   AND   RECEIVERSHIP. 

NOTICE   TO  PRESENT   CIRCULATION   FOR  REDEMPTION. 
CANCELLATION  OF  BONDS. 

Act  June  3,  g^Q  gg^  5229. — Immediately  upon  declaring  the  bonds 
Ift  47 ;  13  of  an  association  forfeited  for  nonpayment  of  its  notes, 
Stat.  L..  114.  ^.j^g  Comptroller  shall  give  notice,  in  such  manner  as  the 
Secretary  of  the  Treasury  shall,  by  general  rules  or  other- 
wise, direct,  to  the  holders  of  the  circulating  notes  of  such 
association,  to  present  them  for  payment  at  the  Treasury 
of  the  United  States ;  and  the  same  shall  be  paid  as  pre- 
sented in  lawful  money  of  the  United  States,  whereupon 
the  Comptroller  may,  in  his  discretion,  cancel  an  amount 
of  bonds  pledged  by  such  association  equal  at  current 
market  rates,  not  exceeding  par,  to  the  notes  paid. 

S\LE  OF  BONDS  AT  AUCTION.  FIRST  LIEN  FOR  REDEEM- 
ING CIRCULATION. 

Act  June  3,  511.  Scc.  5230. — Whenever  the  Comptroller  has  become 
ISs'  47,  \*f:  satisfied,  by  the  protest  or  the  waiver  and  admission 
13  ■  Stat.  L.;  specified  in  section  fifty-two  hundred  and  twenty-six,  or 
^^*'  by  the  report  provided  for  in  section  fifty-two  hundred 

and  twenty-seven,  that  any  association  has  refused  to 
pay  its  circulating  notes,  he  may,  instead  of  canceling  its 
bonds,  cause  so  much  of  them  as  may  be  necessary  to 
redeem  its  outstanding  notes  to  be  sold  at  public  auction 
in  the  city  of  New  York,  after  giving  thirty  days'  notice 
of  such  sale  to  the  association.  For  any  deficiency  in  the 
proceeds  of  all  the  bonds  of  an  association,  when  thus 
sold,  to  reimburse  to  the  United  States  the  amount 
expended  in  paying  the  circulating  notes  of  the  associa- 
tion, the  United  States  shall  have  a  paramount  lien  upon 
all  its  assets ;  and  such  deficiency  shall  be  made  good  out 
of  such  assets  in  preference  to  any  and  all  other  claims 
whatsoever,  except  the  necessary  costs  and  expenses  of 
administering  the  same. 

BONDS  MAY  BE  SOLD  AT  PRIYATE  SALE. 

Act  June  3.  512.  Sec.  5231. — The  Comptroller  may,  if  he  deems  it 
ll^c.'  49 ;  ^*\*:i  for  the  interest  of  the  United  States,  sell  at  private  sale 
Stat.  L.,  114.  ^j^y  q£  ^YiQ  bonds  of  an  association  shown  to  have  made 
default  in  paying  its  notes,  and  receive  therefor  either 
money  or  the  circulating  notes  of  the  association.  But 
no  such  bonds  shall  be  sold  by  private  sale  for  less  than 
par,  nor  for  less  than  the  market  value  thereof  at  the 
time  of  sale;  and  no  sales  of  any  such  bonds,  either  public 
or  private,  shall  be  complete  until  the  transfer  of  the 
bonds  shall  have  been  made  with  the  formalities  pre- 
scribed by  sections  fifty-one  hundred  and  sixty-two, 
fifty-one  hundred  and  sixty-three,  and  fifty-one  hundred 
and  sixty -four. 


DISSOLUTION   AND  RECEIVERSHIP.  105 

DISPOSAL    OF    REDEEMED    NOTES;    REGULATIONS    FOR 
REDEMPTION  RECORDS. 

513.  Sec.  5232. — The  Secretary  of  the  Treasury  may,  j^Act  Janets, 
from  time  to  time,  make  such  regulations  respecting  the  s  e  c'  47 ;    1^ 
disposition  to  be  made  of  circulating  notes  after  presen-  ^*'**-  ^'  ^^■*- 
tation  at  the  Treasury  of  the  United  States  for  payment, 

and  respecting  the  perpetuation  of  the  evidence  of  the 
payment  thereof,  as  may  seem  to  him  proper. 

REDEEMED  NOTES  TO  BE  CANCELED. 

514.  Sec.  5233. — All  notes  of  national  banking  associa-  ^g^ct  J"°e  3. 
tions  presented  at  the  Treasury  of  the  United  States  for  s  e  c'  47 ;  1^ 
payment  shall,  on  being  paid,  be  canceled.  ^-  ^^■*- 

APPOINTMENT  AND  DUTIES  OF  RECEIVERS. 

515.  Sec.  5234. — On  becoming  satisfied,  as  specified  in  ^g-^^t  J"°e  3, 
sections  fiftv-two  hundred  and  twenty-six  and  fifty-two  s  e  c'   56 ;    13 
hundred  and  twenty-seven,  that  any  association  has  re- 
fused to  pay  its  circulating  notes  as  therein  mentioned, 

and  is  in  default,  the  Comptroller  of  the  Currenc}'  may 
forthwith  appoint  a  receiver,  and  require  of  him  such 
bond  and  security  as  he  deems  proper.  Such  receiver, 
under  the  direction  of  the  Comptroller,  shall  take  pos- 
session of  the  books,  records,  and  assets  of  every  descrip- 
tion of  such  association,  collect  all  debts,  dues,  and  claims 
belonging  to  it,  and,  upon  the  order  of  a  court  of  record 
of  competent  jurisdiction,  may  sell  or  compound  all  bad 
or  doubtful  debts,  and,  on  a  like. order,  may  sell  all  the 
real  and  personal  property  of  such  association,  on  such 
terms  as  the  court  shall  direct;  and  may,  if  necessarj'  to 
pay  the  debts  of  such  association,  enforce  the  individual 
liability  of  the  stockholders.  Such  receiver  shall  pay 
over  all  money  so  made  to  the  Treasurer  of  the  United 
States,  subject  to  the  order  of  the  Comptroller,  and  also 
make  report  to  the  Comptroller  of  all  his  acts  and  pro- 
ceedings. Provided^  That  the  Comptroller  may,  if  he  Act  May  15, 
deems  proper,  deposit  any  of  the  mone}'  so  made  in  any  ]^_]\l  '^^  ^^^^ 
regular  Govermnent  depositary,  or  in  any  State  or 
national  bank  either  of  the  city  or  town  in  which  the 
insolvent  bank  was  located,  or  of  a  city  or  town  as  adja- 
cent thereto  as  practicable;  if  such  deposit  is  made  he 
shall  require  the  depositary  to  deposit  United  States 
bonds  or  other  satisfactory'  securities  with  the  Treasurer 
of  the  United  States  for  the  safe-keeping  and  prompt 
payment  of  the  money  so  deposited.  Such  depositary 
shall  pay  upon  such  money  interest  at  such  rate  as  the 
Comptroller  may  prescribe,  not  less,  however,  than  two 
per  centum  per  annum  upon  the  average  monthly  amount 
of  such  deposits. 

NoTEL — Other  provisions  autliorizinjr  the  appointment  of  re- 
ceivers of  national  banks  and  relatini:  to  powers  and  duties  of 
receivers  and  agents  will  be  found  in  the  act  of  June  30,  187G,  as 


•)o 


106  DISSOLUTION   AND  RECER^RSHIP. 

amended  August  3,  1S92,  and  March  2,  1S97,  and  the  act  of  March 
29,  1886.  Both  these  acts  are  set  forth  following  section  5238; 
Revised  Statutes. 

A  receiver  may  also  be  appointed,  under  the  provisions  of  sec- 
tion 5234  of  the  Revised  Statutes  of  the  United  States,  for  the 
following  violations  of  law : 

Where  the  capital  stock  of  a  national  bank  has  not  been  fully 
paid  in  and  it  is  thus  reduced  below  the  legal  minimum  and 
remains  so  for  thirtj'  days.     (Sec.  5141,  R.  S.) 

For  failure  to  make  good  the  lawful  money  reserve  within 
thirty  days  after  notice.     (Sec.  5191,  R.  S.) 

Where  a  bank  purchases  or  acquires  its  own  stock  to  prevent 
loss  upon  a  debt  previously  contracted  in  good  faith,  and  the  same 
Is  not  sold  or  disposed  of  within  six  months  from  the  time  of  its 
purchase.     (Sec.  5201,  R.  S.) 

For  failure  to  make  good  any  impairment  in  its  capital  stock 
and  refusing  to  go  into  liquidation  within  three  months  after 
receiving  notice.     (Sec.  5205,  R.  S.) 

For  false  certification  of  checks  by  any  officer,  clerk,  or  agent. 
(Sec.  5208,  R.  S.) 

NOTICE  TO  CKEDITORS  OF  INSOLTENT  BANKS  TO  PRE- 
SENT CLAIMS. 

Act  June  3,     516.  Scc.  5235. — The  Comptroller  shall,  upon  appoint- 

1864,     c.     106,.  .  J.-        J.      I  •  I,  1         1- 

B  e  c.    50 ;    13  iiig  a  receiver,  cause  notice  to  be  given,  by  advertisement 
Stat.  L.,  114.    ^^  such  newspapers  as  he  may  direct,  for  three  consecu- 
tive months,  calling  on  all  persons  who  may  have  claims 
against  such  association  to  present  the  same,  and  to  make 
legal  proof  thereof. 

DITIDENDS;   DISTRIBUTION   OF   ASSETS   OF  INSOLTENT 
BANKS. 

1864^  c"°*i06;  517.  Sec.  5236.— From  time  to  time,  after  full  provision 
se c.'  50 ;  13 has  been  first  made  for  refunding  to  the  United  States 
^  *  "  ■  any  deficiency  in  redeeming  the  notes  of  such  association, 
the  Comptroller  shall  make  a  ratable  dividend  of  the 
money  so  paid  over  to  him  by  such  receiver  on  all  such 
claims  as  may  have  been  proved  to  his  satisfaction  or  ad- 
judicated in  a  court  of  competent  jurisdiction,  and,  as 
the  proceeds  of  the  assets  of  such  association  are  paid 
over  to  him,  shall  make  further  dividends  on  all  claims 
previously  proved  or  adjudicated;  and  the  remainder  of 
the  proceeds,  if  any,  shall  be  paid  over  to  the  shareholders 
of  such  association  or  their  legal  representatives,  in  pro- 
portion to  the  stock  by  them  respectively  held. 

>VHEN  BANK  MAY  ENJOIN  FURTHER  rROCEEIUNGS. 

1804*  c"°^i06'  ^^^'  ^®^'  5^^"^- — Whenever  an  association  against  wliich 
sec'  50;  1.3 proceedings  have  been  instituted,  on  account  of  any  al- 
stat.  L.,  114.  igggd  refusal  to  redeem  its  circulating  notes  as  aforesaid, 
denies  having  failed  to  do  so,  it  may,  at  any  time  within 
ten  days  after  it  has  been  notified  of  the  appointment  of 
an  agent,  as  provided  in  section  fifty-two  hundred  and 
twenty-seven,  apply  to  the  nearest  circuit,  or  district,  or 
Territorial  court  of  the  United  States  to  enjoin  further 
proceedings  in  the  premises;  and  sucli  court,  after  citing 


DISSOLUTION   AND   RECEIVERSHIP.  107 

the  Comptroller  of  the  Currency  to  show  cause  why  fur- 
ther proceedings  should  not  be  enjoined,  and  after  the 
decision  of  the  court  or  finding  of  a  jury  that  such  asso- 
ciation has  not  refused  to  redeem  its  circulating  notes, 
wiien  legally  presented,  in  the  lawful  money  of  the 
United  States,  shall  make  an  order  enjoining  the  Comp- 
troller, and  any  receiver  acting  under  his  direction,  from 
all  further  proceedings  on  account  of  such  alleged  refusal. 

Note. — See  also  sections  24,  judiciary  act  passed  March  31,  1911, 
and  73G,  Revised  Statutes,  paragraphs  701  and  702,  post. 

FEES  AND  EXPENSES. 

519.  Sec.  5238.— All  fees  for  protesting  the  notes  issued  ^g^ct  June^l. 
by  any  national  banking  association  shall  be  paid  by  the  sec'   si;    li 
person  j)rocuring  the  protest  to  be  made,  and  such  asso-  ^^^^-  ^'  ^^'^^ 
ciation  shall  be  liable  therefor ;  but  no  part  of  the  bonds 
deposited  by  such  association  shall  be  applied  to  the  pay- 
ment of  such  fees.     All  expenses  of  any  preliminary  or 

other  examinations  into  the  condition  of  any  association 
shall  be  paid  by  such  association.  All  expenses  of  any 
receivership  shall  be  paid  out  of  the  assets  of  such  asso- 
ciation before  distribution  of  the  proceeds  thereof. 

WHEN   RECEIVER   MAY   BE   APPOINTED.     ACT   JUNE   30, 

1876. 

520.  Section  1. — That  whenever  any  national  banking  ^g^g*  "'c'l^^iel 
association  shall  be  dissolved,  and  its  rights,  privileges,  sec- 1:  i9  stat! 
and  franchises  declared  forfeited,  as  prescribed  in  section   '' 
fifty-two  hundred  and  thirty-nine  of  the  Revised  Statutes 

of  the  United  States,  or  whenever  any  creditor  of  any 
national  banking  association  shall  have  obtained  a  judg- 
ment against  it  in  any  court  of  record,  and  made  appli- 
cation, accompanied  by  a  certificate  from  the  clerk  of  the 
court  stating  that  such  judgment  has  been  rendered  and 
has  remained  unpaid  for  the  space  of  thirty  clays,  or 
whenever  the  Comptroller  shall  become  satisfied  of  the 
insolvency  of  a  national  banking  association,  he  may, 
after  due  examination  of  its  affairs,  in  either  case,  appoint 
a  receiver,  who  shall  proceed  to  close  up  such  association, 
and  enforce  the  personal  liability  of  the  shareholders,  as 
provided  in  section  fifty-tw^o  hundred  and  thirty-four  of 
said  statutes. 

CREDITOR'S  BILL  AGAINST  SHAREHOLDERS.     ACT  JUNE 
30,  1876. 

521.  Sec.  2. — That  when  any  national  banking  associa-  Act  June  ^o, 
tion  shall  have  gone  into  liquidation  under  the  provisions  sec.  2;  i"9  stat! 
of  section   five  thousand   two   hundred   and   tAventy   of  ^•'  ^^• 

said  statutes,  the  individual  liability  of  the  shareholders 
provided  for  by  section  fifty-one  hundred  and  fifty-one 
of  said  statutes  may  be  enforced  by  any  creditor  of  such 
association,  by  bill  in  equity,  in  the  nature  of  a  creditor's 


108  DISSOLUTION   AND  RECEIVERSHIP. 

bill,  brought  by  such  creditor  on  behalf  of  himself  and  of 
all  other  creditors  of  the  association,  against  the  share- 
holders thereof,  in  any  court  of  the  United  States  having 
original  jurisdiction  in  equity  for  the  district  in  which 
such  association  may  have  been  located  or  established. 

APP0INT3IENT,  QUALIFICATION,  AXD  DUTIES  OF  SHARE- 
HOU)EES'  AGENT.  ACT  JUNE  30,  1876,  AS  AMENDED 
1892,   1897. 

Act  June  30,  522.  Sec.  3. — That  whenever  any  association  shall  have 
sec.^3 ;  19  stlt!  been  or  shall  be  placed  in  the  hands  of  a  receiver,  as  pro- 
amended'  au-^ '^'^^^^^^  i^  scction  fifty-two  hundred  and  thirty-four  and 
itat^^L^'  34"?°^^^^^  sections  of  the  Revised  Statutes  of  the  United 
and'  Mar/  2^  States,  and  when,  as  provided  in  section  fifty-two  hun- 
iff  6odi^  ^^^'  ^^Gcl  and  thirty-six  thereof,  the  Comptroller  of  the  Cur- 
rency' shall  have  paid  to  each  and  every  creditor  of  such 
association,  not  including  shareholders  who  are  creditors 
of  such  association,  whose  claim  or  claims  as  such  creditor 
shall  have  been  proved  or  allowed  as  therein  prescribed, 
the  full  amount  of  such  claims,  and  all  expenses  of  the 
receivership  and  the  redemption  of  the  circulating  notes 
of  such  association  shall  have  been  provided  for  by  de- 
positing lawful  mone}'  of  the  United  States  with  the 
Treasurer  of  the  United  States,  the  Comptroller  of  the 
Currency  shall  call  a  meeting  of  the  shareholders  of  such 
association  by  giving  notice  thereof  for  thirty  days  m  a 
newspaper  published  in  the  town,  city,  or  county  where 
the  business  of  such  association  was  carried  on,  or  if  no 
newspaper  is  there  published,  in  the  newspaper  published 
nearest  thereto.  At  such  meeting  the  shareholders  shall 
determine  whether  the  receiver  ^hall  be  continued  and 
shall  wind  up  the  affairs  of  such  association,  or  whether 
an  agent  shall  be  elected  for  that  purpose,  and  in  so  de- 
termining the  said  shareholders  shall  vote  by  ballot,  in 
person  or  by  proxy,  each  share  of  stock  entitling  the 
holder  to  one  vote,  and  the  majority  of  the  stock  in  value 
and  number  of  shares  shall  be  necessary  to  determine 
whether  the  said  receiver  shall  be  continued,  or  whether 
an  agent  shall  be  elected.  In  case  such  majority  shall 
determine  that  the  said  receiver  shall  be  continued,  the 
said  receiver  shall  thereupon  proceed  with  the  execution 
of  his  trust,  and  shall  sell,  dispose  of.  or  otherwise  collect 
the  assets  of  the  said  association,  and  shall  possess  all  the 
powers  and  authority,  and  be  subject  to  all  the  duties  and 
liabilities  originally  conferred  or  imposed  upon  him  by  his 
appointment  as  such  receiver,  so  far  as  the  same  remain 
applicable.  In  case  the  said  meeting  shall,  by  the  vote 
of  a  majority  of  the  stock  in  value  and  number  of  shares, 
determine  that  an  agent  shall  be  elected,  the  said  meeting 
shall  thereupon  proceed  to  elect  an  agent,  voting  by  bal- 
lot, in  person  or  by  proxy,  each  share  of  stock  entitling 
the  holder  to  one  vote,  and  the  person  who  shall  receive 
votes  representing  at  least  a  majority  of  stock  in  value 


DISSOLUTION   AND  RECEIVERSHIP.  109 

and  number  shall  be  declared  the  agent  for  the  purposes 
hereinafter  provided;  and  whenever  any  of  the  share- 
holders of  the  association  shall,  after  the  election  of  such 
agent,  have  executed  and  filed  a  bond  to  the  satisfaction 
of  the  Comptroller  of  the  Currency,  conditioned  for  tlie 
payment  and  discharge  in  full  of  each  and  every  claim 
that  may  thereafter  be  proved  and  allowed  by  and  before 
a  competent  court,  and  for  the  faithful  performance  of 
all  and  singular  the  duties  of  such  trust,  the  Comptroller 
and  the  receiver  shall  thereupon  transfer  and  deliver  to 
such  agent  all  the  undivided  or  uncollected  or  other  as- 
sets of  such  association  then  remaining  in  the  hands  or 
subject  to  the  order  and  control  of  said  Comptroller  and 
said  receiver,  or  either  of  them ;  and  for  this  purpose  said 
Comptroller  and  said  receiver  are  hereby  severally  em- 
powered and  directed  to  execute  any  deed,  assignment, 
transfer,  or  other  instrument  in  writing  that  may  be  nec- 
essary and  proper;  and  upon  the  execution  and  delivery 
of  such  instrument  to  the  said  agent  the  said  Comptroller 
and  the  said  receiver  shall  by  virtue  of  this  act  be  dis- 
charged from  any  and  all  liabilities  to  such  association 
and  to  each  and  all  the  creditors  and  shareholders  thereof. 
Upon  receiving  such  deed,  assignment,  transfer,  or 
other  instrument  the  person  elected  such  agent  shall  hold, 
control,  and  dispose  of  the  assets  and  property  of  such 
association  which  he  may  receive  under  the  terms  hereof 
for  the  benefit  of  the  shareholders  of  such  association, 
and  he  may,  in  his  own  name,  or  in  the  name  of  such 
association,  sue  and  be  sued  and  do  all  other  lawful  acts 
and  things  necessary  to  finally  settle  and  distribute  the 
assets  and  property  in  his  hands,  and  may  sell,  compro- 
mise, or  compound  the  debts  due  to  such  association,  with 
the  consent  and  approval  of  the  circuit  or  district  court 
of  the  United  States  for  the  district  where  the  business  of 
such  association  was  carried  on,  and  shall  at  the  conclu- 
sion of  his  tcust  render  to  such  district  or  circuit  court  a 
full  account  of  all  his  proceedings,  receipts,  and  expendi- 
tures as  such  agent,  which  court  shall,  upon  due  notice, 
settle  and  adjust  such  accounts  and  discharge  said  agent 
and  the  sureties  upon  said  bond.  And  in  case  any  such 
agent  so  elected  shall  refuse  to  serve,  or  die,  resign,  or 
be  removed,  any  shareholder  may  call  a  meeting  of  the 
shareholders  of  such  association  in  the  town,  city,  or  vil- 
lage where  the  business  of  the  said  association  was  car- 
ried on,  by  giving  notice  thereof  for  thirty .  days  in  a 
newspaper  published  in  said  town,  city,  or  village,  or  if 
no  newspaper  is  there  published,  in  the  newspaper  pub- 
lished nearest  thereto,  at  which  meeting  the  shareholders 
shall  elect  an  agent,  voting  by  ballot,  in  person  or  by 
proxy,  each  share  of  stock  entitling  the  holder  to  one 
vote,  and  when  such  agent  shall  have  received  votes  rep- 
resenting at  least  a  majority  of  the  stock  in  value  and 
number  of  shares,  and  shall  have  executed  a  bond  to  the 


110  DISSOLUTION  AlTD  KECErVT^ESHTP. 

shareholders  conditioned  for  the  faithful  performance 
of  his  duties,  in  the  penalty  fixed  by  the  shareholders  at 
said  meeting,  with  two  sureties,  to  be  approyed  by  a 
judge  of  a  court  of  record,  and  file  said  bond  in  the  office 
of  the  clerk  of  a  court  of  record  in  the  county  where  the 
business  of  said  association  was  carried  on,  he  shall  have 
all  the  rights,  powers,  and  duties  of  the  agent  first  elected 
as  hereinbefore  provided.  At  any  meeting  held  as  here- 
inbefore provided  administrators  or  executors  of  de- 
ceased shareholders  may  act  and  sign  as  the  decedent 
might  have  done  if  living,  and  guardians  of  minors  and 
trustees  of  other  persons  may  so  act  and  sign  for  their 
ward  or  wards  or  cestui  que  trust.  The  proceeds  of  the 
assets  or  property  of  any  such  association  which  may  be 
undistributed  at  the  time  of  such  meeting  or  may  be  sub- 
sequently received  shall  be  distributed  as  follows: 

First.  To  pay  the  expenses  of  the  execution  of  the 
trust  to  the  date  of  such  payment. 

Second.  To  repay  any  amount  or  amounts  which  have 
been  paid  in  by  any  shareholder  or  shareholders  of  such 
association  upon  and  by  reason  of  any  and  all  assess- 
ments made  upon  the  stock  of  such  association  by  the 
order  of  the  Comptroller  of  the  Currency  in  accordance 
with  the  provisions  of  the  statutes  of  the  United  States; 
and 

Third.  The  balance  ratably  among  such  stockholders, 
in  proportion  to  the  number  of  shares  held  and  owned  by 
each.  Such  distribution  shall  be  made  from  time  to  time 
as  the  proceeds  shall  be  received  and  as  shall  be  deemed 
advisable  by  the  said  Comptroller  or  said  agent. 

Note. — Other  sections  of  act  June  30,  1876: 
Section  4  amends  Revised  Statutes,  5205. 
Section  5  relates  to  counterfeit  notes. 

Section  6  relates  to  savings  banks  and  trust  companies,  organ- 
ized  under   act  of  Congress. 

RECEITER  MAY  PURCHASE  PROPERTY  TO  PROTECT  HIS 
TRUST.     ACT  MARCH  29,  1886. 

]886*"c^*"'sec'  ^^^'  ^^^'  ^' — '^^at  whenever  the  receiver  of  any  na- 
i;  24  st'at.  L.^tional  bank  duly  appointed  by  the  Comptroller  of  the 
*•  Currency,  and  who  shall  have  duly  qualified  and  entered 

upon  the  discharge  of  his  trust,  shall  find  it  in  his  opinion 
necessary,  in  order  to  fully  protect  and  benefit  his  said 
trust,  to  the  extent  of  any  and  all  equities  that  such  trust 
may  have  in  any  property,  real  or  personal,  by  reason 
of  any  bond,  mortgage,  assignment,  or  other  proper  legal 
claim  attaching  thereto,  and  which  said  property  is  to  be 
sold  under  any  execution,  decree  of  foreclosure,  or  proper 
order  of  any  court  of  jurisdiction,  he  may  certify  the 
facts  in  the  case,  together  with  his  opinion  as  to  the  value 
of  the  property  to  be  sold,  and  the  value  of  the  equity  his 
said  trust  may  have  in  the  same,  to  the  Comptroller  of 
the  Currency,  together  with  a  request  for  the  right  and 


DISSOLUTION"   AND   EECEIVERSHIP.  Ill 

authority  to  use  and  employ  so  much  of  the  money  of 
said  trust  as  may  be  necessary  to  purchase  such  property 
at  such  sale. 

APPROVAL  OF  REQUEST.     ACT  MARCH  29,  1S86. 

524.  Sec.  2. — That  such  request,  if  approved  by  the  Act.  Mar  29. 
Comptroller  of  the  Currency,  shall  be,  together  with  the  2? 24*'sS.T; 
certificate  of  facts  in  the  case,  and  his  recommendation  as  ®' 

to  the  amount  of  money  which,  in  his  judgment,  should  be  • 
so  used  and  employed,  submitted  to  the  Secretary  of  the 
Treasury,  and  if  the  same  shall  likewise  be  approved  by 
him,  the  request  shall  be  by  the  Comptroller  of  the  Cur- 
rency allowed,  and  notice  thereof,  with  copies  of  the  re- 
quest, certificate  of  facts,  and  indorsement  of  approvals, 
shall  be  filed  with  the  Treasurer  of  the  United  States. 

PAYMENT.     ACT  MARCH  29,  1886. 

525.  Sec.  3. — That  whenever  any  such  request  shall  be^o^^* '^H-^ 

n  1  1  •!/>  -Ill  •  -1    /-^  n  /.  looo,  C.  28,  sec. 

allowed  as  herembefore  provided,  the  said  Comptroller  of  3 ;  24  stat.  l., 
the  Currency  shall  be,  and  is,  empowered  to  draw  upon  ^' 
and  from  such  funds  of  any  such  trust  as  may  be  depos- 
ited with  the  Treasurer  of  the  United  States  for  the 
benefit  of  the  bank  in  interest,  to  the  amount  as  may  be 
recommended  and  allowed  and  for  the  purpose  for  which 
such  allowance  was  made:  Provided,  however,  That  all 
payments  to  be  made  for  or  on  account  of  the  purchase  of 
any  such  property  and  under  any  such  allowance  shall  be 
made  by  the  Comptroller  of  the  Currency  direct,  with  the 
approval  of  the  Secretary  of  the  Treasury,  for  such  pur- 
pose only  and  in  such  manner  as  he  may  determine  and 
order. 

PENALTY  FOR  VIOLATION  OF  THIS  TITLE;  FORFEITURE 
OF  CHARTER;  INDIVIDUAL  LIABILITY  OF  DIRECTORS. 

526.  Sec.  5239.— If  the  directors  of  any  national  bank-  jg^ct  June  ^3, 
ing  association   shall  knowingly   violate,  or  knowingly  s  e  c'   53 ;    13 
permit  any  of  the  officers,  agents,  or  servants  of  the  asso-  ^*^*'  ^'  ^^^' 
ciation  to  violate  any  of  the  provisions  of  this  title,  all 

the  rights,  privileges,  and  franchises  of  the  association 
shall  be  thereby  forfeited.  Such  violation  shall,  how- 
ever,_be  determined  and  adjudged  by  a  proper  circuit, 
district,  or  Territorial  court  of  the  United  State.s,  in  a 
suit  brought  for  that  purpose  by  the  Comptroller  of  the 
Currency,  in  his  own  name,  before  the  association  shall  be 
declared  dissolved.  And  in  cases  of  such  violation,  every 
director  who  participated  in  or  assented  to  the  same  shall 
be  held  liable  in  his  personal  and  individual  capacity  for 
all  damages  which  the  association,  its  shareholders,  or  any 
other  person,  shall  have  sustained  in  consequence  of  such 
violation. 


112  DISSOLUTION   AITD  RECEIYERSHIP. 

APPOINTMENT  OF  EXAMINERS,  COMPENSATION. 

186?  c"°%6:  527.  Sec.  5240  [as  amended  1913].— The  Comptroller  of 
sec.  '  54 ;  13  the  Currency,  with  the  approval  of  the  Secretary  of  the 
^* Act  ^Feb/ 19,  Treasury,  shall  appoint  examiners,  who  shall  examine 
stat'L  ^3^2^  ■^^  ^^'®^y  member  bank  at  least  twice  in  each  calendar  year 
Act  Dec.  23,  and  oftener  if  considered  necessary :  Provided,  however, 
IV'  'stiu  L.',  That  the  Federal  Reserve  Board  may  authorize  exam- 
2'^i-  ination  by  the  State  authorities  to  be  accepted  in  the 

case  of  State  banks  and  trust  companies  and  may  at  any 
time  direct  the  holding  of  a  special  examination  of 
State  banks  or  trust  companies  that  are  stockholders  in 
any  Federal  reserve  bank.  The  examiner  making  the 
examination  of  any  national  bank,  or  of  any  other  mem- 
ber bank,  shall  have  power  to  make  a  thorough  exami- 
nation of  all  the  affairs  of  the  bank,  and  in  doing  so  he 
shall  have  power  to  administer  oaths  and  to  examine 
any  of  the  officers  and  agents  thereof  under  oath  and 
shall  make  a  full  and  detailed  report  of  the  condition  of 
said  bank  to  the  Comptroller  of  the  Currency. 

The  Federal  Reserve  Board,  upon  the  recommendation 
of  the  Comptroller  of  the  Currency,  shall  fix  the  salaries 
of  all  oank  examiners  and  make  report  thereof  to  Con- 
gress. The  expense  of  the  examinations  herein  provided 
for  shall  be  assessed  by  the  Comptroller  of  the  Currency 
upon  the  banks  examined  in  proportion  to  assets  or  re- 
sources held  by  the  banks  upon  the  dates  of  examination 
of  the  various  banks. 

In  addition  to  the  examinations  made  and  conducted 
by  the  Comptroller  of  the  Currency,  every  Federal  reserve 
bank  may,  with  the  approval  of  the  Federal  reserve  agent 
or  the  Federal  Reserve  Board,  provide  for  special  exami- 
nation of  member  banks  within  its  district.  The  expense 
of  such  examinations  shall  be  borne  by  the  bank  ex- 
amined. Such  examinations  shall  be  so  conducted  as  to 
inform  the  Federal  reserve  bank  of  the  condition  of  its 
member  banks  and  of  the  lines  of  credit  which  are  being 
extended  by  them.  Every  Federal  reserve  bank  shall  at 
all  times  furnish  to  the  Federal  Reserve  Board  such  in- 
formation as  may  be  demanded  concerning  the  condition 
of  any  member  bank  within  the  district  of  the  said 
Federal  reserve  bank. 

No  bank  shall  be  subject  to  any  visitatorial  powers 
other  than  such  as  are  authorized  by  law,  or  vested  in 
the  courts  of  justice  or  such  as  shall  be  or  shall  have 
been  exercised  or  directed  by  Congress,  or  by  either  Hou^^^e 
thereof  or  by  any  committee  of  Congress  or  of  either 
House  duly  authorized. 

The  Federal  Reserve  Board  shall,  at  least  once  each 
year,  order  an  examination  of  each  Federal  reserve  bank, 
and  upon  joint  application  of  ten  member  banks  the 
Federal  Reserve  Board  shall  order  a  special  examination 
and  report  of  the  condition  of  any  Federal  reserve  bank. 


DISSOLUTION   AND   RECEIVERSHIP.  113 

LIMITATION  OF  TISITORIAL  POWERS. 

528.  Sec.  5241. — No  association  shall  be  subject  to  any  j^^^t  c"°%6' 
visitorial  powers  other  than  such  as  are  authorized  by  sec'  54:  i.^ 
this  Title,  or  are  vested  in  the  courts  of  justice.  ^***'  ^"  ^^® 

Note. — See  also  the  fourth  paragraph  in  section  5240,  Immedi- 
ately preceding. 

TRANSFERS.    WHEN    TOID;    ILLEGAL    PREFERENCE    OP 
CREDITORS. 

529.  Sec.  5242. — All  transfers  of  the  notes,  bonds,  bills  ^^Act  J"°'^j^3. 
of  exchange,  or  other  evidences  of  debt  owing  to  anyseV   52;    is 
national  banking  association,  or  of  deposits  to  its  credit  ;^^^^-  ^"  •^^^• 
all  assignments  of  mortgages,  sureties  on  real  estate,  or 

of  judgments  or  decrees  in  its  favor;  all  deposits  of 
money,  bullion,  or  other  valuable  thing  for  its  use,  or  for 
the  use  of  any  of  its  shareholders  or  creditors;  and  all 
payments  of  money  to  either,  made  after  the  commission 
of  an  act  of  insolvency,  or  in  contemplation  thereof,  made 
with  a  view  to  prevent  the  application  of  its  assets  in  the 
manner  prescribed  by  this  chapter,  or  with  a  view  to  the 
preference  of  one  creditor  to  another,  except  in  payment 
of  its  circulating  notes,  shall  be  utterh"  null  and  void; 
and  no  attachment,  injunction  or  execution,  shall  be  is- 
sued against  such  association  or  its  property  before  final 
judgment  in  any  suit,  action,  or  proceeding,  in  any  State, 
county,  or  municipal  court. 

USE  OF  THE  TITLE  "  NATIONAL." 

530.  Sec.  5243. — All  banks  not  organized  .and  transact-     Act  Mar.  3, 
ing  business  under  the  national  currency  laws,  or  under  gee. ^3 ;  17  s^tal' 
this  Title,  and  all  persons  or  corporations  doing  the  busi-  ^-  ^<^3. 
ness  of  bankers,  brokers,  or  savings  institutions,  except 

savings  banks  authorized  b}^  Congress  to  use  the  word 
"  national "  as  a  part  of  their  corporate  name,  are  pro- 
hibited from  using  the  word  "  national "  as  a  portion  of 
the  name  or  title  of  such  bank,  corporation,  firm,  or 
partnership ;  and  any  violation  of  this  prohibition  com- 
mitted after  the  third  day  of  September,  eighteen  hun- 
dred and  seventy-three,  shall  subject  the  party  charge- 
able therewith  tc  a  penalty  of  fifty  dollars  for  each  day 
during  which  it  is  committed  or  repeated. 

164312°— 20 S 


]^2.4  DISSOLUTION   AUD  fiECElVEBSHIP. 


FEDERAL  RESERVE  ACT. 


115 


CHAPTER  VI. 


THE    FEDERAL    RESERVE    ACT. 


As  amended  by  the  acts  approved  August  4  and  August  15,  1914, 
March  3,  1915,  September  7,  1916,  June  21,  1917,  and  March  3, 
1919. 


600. 
601. 
602. 

602a. 
602b. 
602c. 
602cl. 
602e. 

602f. 


602g. 
60211. 


602i. 

602j. 
602k. 
6021. 

602m 
602n. 

603. 

604. 


604a. 
604b. 

604c. 

604(1. 
604e. 

604f. 


604g. 
604b. 


Title  of  act. 

Definition  of  terras. 

Federal  reserve  districts — or- 
ganization committee. 

Authority  of  committee. 

Acceptance  of  terms  of  act. 

Subscriptions    to    capital    stock. 

Responsibility    of   shareholders. 

Failure  of  national  banks  to  ac- 
cept terms  of  act — penalty. 

Failure  of  national  banks  to 
become  member  banks — pen- 
alty. 

Public  subscriptions — when  ac- 
cepted. 

Limit  to  stock  held  by  any  in- 
dividual copartnership  or  cor- 
poration other  than  a  mem- 
ber bank.  Public  stock,  how 
transferable. 

Allotment  of  stock  to  United 
States. 

Voting   power. 

Transfer  of  stock. 

Minimum  capital  of  Federal  re- 
serve bank. 

Reserve  cities,  status  of. 

Authority  of  organization  com- 
mittee   to    employ    assistants. 

Brandies  of  Federal  reserve 
banks. 

Organization  of  Federal  reserve 
banks.  Application  for  stock 
by  national  banks. 

certificate. 
Federal      reserve 


Organization 
Powers      of 

banks. 
Directors     of 

banks. 
Classification 


Federal     reserve 


of 


directors, 
class  A  and  class 


B 


class   C   direc- 
reserve  agent, 


Election  of 
directors. 

Appointment  of 
tors.  Federal 
duties  of. 

Compensation  of  directors. 

Organization  of  Federal  reserve 
banks.  Authority  of  organi- 
zation committee. 


604i.  First  meeting  of  directors.  Des- 
ignation of  terms  of  office. 

605.  Increase  and  decrease  of  capital 
stock. 

605a.    Stock  not  transferable. 

605b.    Increase  of  capital  stock. 

605c.    Applications    for    capital    stock. 

605d.  Certificate  of  increase  in  stock 
of  Federal  reserve  bank. 

605e.    Reduction  of  capital  stock. 

006.      Insolvency  of  member  bank. 

(JU~.      Divisioa  of  earnings. 

607a.    Tax  es:emptions. 

608.  Conversion  of  State  banks  into 

national  banks. 

609.  State  banks  may  subscribe. 
609a.  Applications   for   membership. 
G09b.    Regulations  and   restrictions. 
609c.    Member  banks  required  to  make 

reports  to  Federal  Reserve 
Board  and  subject  to  exami- 
nation by  examiners  ap- 
pointed by  the  board  and  such 
banks'  ofliicers,  agents,  and  em- 
ployees subject  to  penalties  of 
section  5209. 

609d.  Failure  to  comply  with  regula- 
tions— penalty. 

609e.  Withdrawal  from  membership 
in  Federal  reserve  bank  by 
State  bank  or  trust  company. 

609f.  Amount  of  capital  required  to 
enable  State  bank  to  become 
member  bank. 

609g.  Rights,  powers,  and  liabilities 
of  State  banks  which  Itoconie 
member  banks. 

610.  Appointment,  compensation,  and 

qualification  of  members  of 
Federal  Reserve  Board. 

610a.  Governor  and  vice  governor; 
officers;  qualification  of  mem- 
bers. 

610b.    Provision   for  expenses. 

610c.  First  meeting  of  board  :  Secre- 
tary of  Treasury  chairman  of 
board. 

117 


118 


THE  FEDERAL  RESERVE   ACT. 


610d.  Member  of  Federal  Reserve 
Board  not  to  be  officer,  direc- 
tor, or  stockholder  in  any 
banking  institution  or  trust 
company. 

610e.    Vacancies  on  board — how  filled. 

610f.  Powers  of  Secretai-y  of  Treas- 
ury. 

610g.  Federal  Reserve  Board  to  make 
annual  report  to  Speaker  of 
the  House  of  Representatives. 

610h.    Comptroller  of  the  Currency. 

611.  Powers     of     Federal     Reserve 

Board. 

611a.  Examination  of  books  of  Fed- 
eral reserve  banks  and  mem- 
ber banks.  Board  may  re- 
quire reports. 

611b.    Rediscounts. 

611e.  Suspension  of  reserve  require- 
ments. 

611  d.  Issue  and  retirement  of  Fed- 
eral reserve  notes. 

611e.    Reserve  cities. 

611f.  Suspension  or  removal  of  offi- 
cer or  director  of  a  Federal 
reserve  bank. 

611g.  Writing  off  doubtful  or  worth- 
less assets. 

611h.  Suspension  of  operations  of 
Federal  reserve  bank. 

611i.  Requirement  of  bonds  from 
Federal  reserve  agents  and 
authority  to  make  necessary 
regulations  under  this  act. 

611j.    General  supervision. 

611k.  Permit  to  national  banks  to  act 
as  trustee,  executor,  admin- 
istrator, or  registrar  of  stocks 
and  bonds. 

6111.  Employment  of  attorneys, 
clerks,  etc.,  and  provisions  for 
payment  of  salaries. 

611m.  Discount  by  Federal  reserve 
bank  of  paper  secured  by 
United  States  bonds  issued 
since  April  24,  1917. 

612.  Federal  ad\isory  council. 
612a.    Powers     of     Federal     advisory 

council. 

613.  Powers    of    Federal    reserve 

banks. 

613a.  Rediscounts — notes,  drafts,  and 
bills  of  exchange. 

613b.  Acceptances  and  limitations 
thereof. 

613c.  Exceptions  as  to  limit  of  indebt- 
edness. Power  to  act  as  in- 
surance agent,  as  real-estate 
loan  broker,  and  to  accept 
drafts,  etc. 

614.  Open-market  operations. 

615.  Government  deposits. 

616.  Federal   reserve   notes   author- 

ized. 
616a.    Applications  for  Federal  re.serve 
notes. — Collateral  security. 


616b.  Reserve  requirements  for  Fed- 
eral reserve  banks. 

616c.  Issue  and  redemption  of  Fed- 
eral reserve  notes.  No  Fed- 
eral reserve  bank  permitted  to 
pay  out  notes  issued  through 
another  Federal  reserve  bank. 

616d.  Deposits  of  gold  with  Treasurer 
for  redemption  of  Federal  re- 
serve notes. 

616e.  Federal  Reserve  Board  may 
grant  or  reject  application  of 
Federal  reserve  bank  for  Fed- 
eral reserve  notes.  Federal 
reserve  notes  first  lien  on  all 
the  assets  of  the  bank. 

616f.     Reduction  of  note  issues. 

61 6g.    Substitution  of  collateral. 

616h.  Preparation  of  Federal  reserve 
notes.  Plates  and  dies  to  be 
under  control  of  Comptroller 
of  Currency.  Where  notes  are 
to  be  deposited. 

616i.  Appropriation  for  expense  of 
printing  national  -  bank  notes 
may  be  used  for  printing  Fed- 
eral reserve  notes. 

616j.  When  Federal  reserve  bank 
shall  receive  checks  and  drafts 
on  deposit  at  par. 

616k.  Charges  for  collection  and  for 
sale  of  exchange. 

6161.  Federal  Reserve  Board  may  ex- 
ercise functions  of  a  clearing 
house  and  may  require  Fed- 
eral reserve  banks  to  exercise 
such  functions. 

616m.  Secretary  of  the  Treasury  to  re- 
ceive deposits  of  gold  coin  or 
gold  certificates  with  the 
Treasurer  or  Assistant  Treas- 
urer of  the  United  States  when 
tendered  by  any  Federal  re- 
serve bank  or  Federal  reserve 
agent  for  credit  to  its  or  his 
account  with  the  Federal  Re- 
serve Board. 

617.  National  banks  not  required  to 

make  deposit  of  United  States 
bonds  prior  to  commencement 
of  business. 

618.  Refunding   bonds.     Retirement 

of  circulating  notes. 

61Sa.  Purchase  of  United  States 
bonds  by  Federal  reserve 
banks. 

618b.  Issue  of  circulating  notes  to 
Federal  reserve  banks  on  se- 
curity of  United  States  bonds. 
Circulating  notes  so  issued 
obligations  of  Federal  reserve 
bank, 

618c.  Issue  of  one-year  gold  notes  and 
3  per  cent  bonds  of  the  United 
States  in  exchange  for  2  per 
cent  United  States  bonds. 


THE   FEDERAL  RESERVE   ACT. 


119 


61 8d.  Exchange  of  3  per  cent  bonds 
for  one-year  gold  notes. 

619.  Bank    reserves.      Demand    and 

time  deposits  defined.  Reserve 
requirements,   when   effective. 

619a.  Reserve  requirements  for  banks 
not  in  reserve  cities. 

619b.  Reserve  requirements  for  banks 
in  reserve  cities. 

619c.  Reserve  requirements  for  banks 
in  central   reserve  cities. 

619d  Member  bank  forbidden  to  keep 
on  deposit  with  nonmember 
bank  a  sum  in  excess  of  10 
per  cent  of  its  own  capital  and 
surplus  or  to  secure  discounts 
for  nonmember  bank. 

619e.  Withdrawal  of  reserve  by  mem- 
ber bank. 

619f.  Reserve  requirement,  how  esti- 
mated. 

619g.  Reserve  requirements  for  na- 
tional banks  located  in  Alaska 
or  outside  the  continental 
United  States. 

620.  Redemption    fund    with    Treas- 

urer not  to  be  counted  as  re- 
serve. 

621.  Bank    examinations.      Appoint- 

ment and  powers  of  examin- 
ers. Acceptance  of  reports  of 
examinations  by  State  au- 
thority. 

621a.    Salaries  of  bank  examiners. 

621b.  Examinations  by  Federal  re- 
serve bank. 

621c.  Examinations  of  Federal  re- 
serve banks. 

622a.  Member  bank  can  not  make  loan 
or  grant  a  gratuity  to  any 
national  bank  examiner. 

622b.  National  bank  examiner  can 
not  perform  any  service  for 
compensation  for  any  bank  or 


622c. 


622d. 


622e. 


622f. 


623. 

624. 
625. 
626. 


627. 


627a. 


628. 
629. 

630. 


officer.  Examiner  can  not 
disclose  the  names  of  bor- 
rowers or  collateral  without 
first  obtaining  written  con- 
sent of  Comptroller. 

Penalty  for  oflicer,  director,  or 
employee  of  member  bank 
who  receives  any  commission 
or  gift  in  connection  with  any 
loan. 

Purchase  of  securities  or  prop- 
erty from  one  of  its  directors, 
or  sales  to  a  director  by  a 
member  bank. 

Rate  of  interest  paid  directors, 
officers,  or  employees  not  to 
exceed  that  paid  to  other  de- 
positors. 

Penalty  for  violation  of  any  of 
the  provisions  of  section  22 
oi  the  Federal  i-eserve  act. 

Liability  of  stockholders  of  na- 
tional banks. 

Loans  on  real  estate. 

Foreign  branches. 

Repeal  of  provisions  of  law  in- 
consistent with  the  provisions 
of  the  Federal  reserve  act. 

Act  of  May  30,  1908,  extended 
to  June  30,  1915.  Reenact- 
ment  of  certain  sections  of 
Revised  Statutes. 

Rate  of  taxation  on  circulating 
notes  secured  otherwise  than 
by  bonds  of  the  United 
States.  When  Secretary  of 
Treasury  authorized  to  sus- 
pend limitations  of  act  of 
May  30,  1908. 

Reduction  of  capital  of  national 
banks. 

Invalidation  of  clause,  etc.,  in 
act  not  to  invalidate  remain- 
der of  act. 

Reservation  of  right  to  amend 
or  repeal. 


TITLE  OF  ACT. 

600.  Be  it  enacted  hy  the  Senate  and  House  of  Repre-  ^^f  ^|^;  -^\ 
sentatives  of  the  United  States  of  America  in  Congress  ^^    'stat.'  L.i 
assembled,  That  the  short  title  of  this  Act  shall  be  the"    " 
"  Federal  Reserve  Act." 


DEFINITION  OF  TERMS. 

601.  Wherever  the  word  "bank"  is  used  in  this  Act, ,  Act.  Dec.  23, 
the  word  shall  be  held  to  include  State  bank,  bankinof.ss    'stat.'   l.'. 
association,  and  trust  company,  except  where  national  '-^^• 
banks  or  P  ederal  reserve  banks  are  specifically  referred  to. 


120  THE  FEDERAL  RESERVE  ACT. 

The  terms  "national  bank"  and  "national  banking 
association  "  used  in  this  Act  shall  be  held  to  be  synony- 
mous and  interchangeable.  The  term  "member  bank" 
shall  be  held  to  mean  any  national  bank.  State  bank,  or 
bank  or  trust  company  which  has  become  a  member  of 
one  of  the  reserve  banks  created  by  this  Act.  The  term 
"  board  "  shall  be  held  to  mean  Federal  Reserve  Board ; 
the  term  "  district "  shall  be  held  to  mean  Federal  reserve 
district;  the  term  "reserve  bank"  shall  be  held  to  mean 
Federal  reserve  bank. 

FEDERAL    RESERYE    DISTRICTS— ORG  ANIZATIO     COM- 
MITTEE. 

^Act  Dec.  23,  QQ2,  Scc.  2. — As  sooH  as  practicable,  the  Secretary  of 
38  ■  stat.'^"  L.;  the  Treasury,  the  Secretary  of  Agriculture  and  the 
^*^*  Comptroller  of  the  Currency,  acting  as  "The  Reserve 

Bank  Organization  Committee,"  shall  designate  not  less 
than  eight  nor  more  than  twelve  cities  to  be  known  as 
Federal  reserve  cities,  and  shall  divide  the  continental 
United  States,  excluding  Alaska,  into  districts,  each  dis- 
trict to  contain  only  one  of  such  Federal  reserve  cities. 
The  determination  of  said  organization  committee  shall 
not  be  subject  to  review  except  by  the  Federal  Reserve 
Board  when  organized:  Provided,  That  the  districts 
shall  be  apportioned  with  due  regard  to  the  convenience 
and  customary  course  of  business  and  shall  not  neces- 
sarily be  coterminous  with  any  State  or  States.  The  dis- 
tricts thus  created  may  be  readjusted  and  new  districts 
may  from  time  to  time  be  created  by  the  Federal  Reserve 
Board,  not  to  exceed  twelve  in  all.  Such  districts  shall 
be  known  as  Federal  reserve  districts  and  may  be  desig- 
nated by  number.  A  majority  of  the  organization  com- 
mittee shall  constitute  a  quorum  with  authority  to  act. 

AUTHORITY  OF  COMMITTEE. 

Act  Dec.  23,  602a.  Said  organization  committee  shall  be  authorized 
sl^^'sut?*  L.'.to  employ  counsel  and  expert  aid.  to  take  testimony,  to 
252.  send  for  persons  and  papers,  to  administer  oaths,  and  to 

make  such  investigation  as  may  be  deemed  necessary  by 
the  said  committee  in  determining  the  reserve  districts 
and  in  designating  the  cities  within  such  districts  where 
such  Federal  reserve  banks  shall  be  severally  located. 
The  said  committee  shall  supervise  the  organization  in 
each  of  the  cities  designated  of  a  Federal  reserve  bank, 
which  shall  include  in  its  title  the  name  of  the  city  in 
which  it  is  situated,  as  "  Federal  Reserve  Bunk  of 
Chicago." 

ACCEPTANCE  OF  TERMS  OF  ACT. 

Act  Dec.  2a,     602b.  Under  regulations  to  be  prescribed  by  the  organi- 

38^%tur'   L^^'^^^^^^  committee,  every  national  banking  association  in 

252.  '  "^  ■       "the  TTnited  States  is  hereby  required,  and  every  eligible 

bank   in    the   United   States   and   e\ery   trust  company 


nrE  FEDERAL  RESERVE  ACT.  121 

within  the  District  of  Cohimbia,  is  hereby  authorized  to 
signify  in  writing,  within  sixty  days  after  the  passage  of 
this  act,  its  acceptance  of  the  terms  and  provisions 
hereof, 

SUBSCRIPTIONS  TO  CAPITAL  STOCK. 

602c.  When  the  organization  committee  shall  have,^A^^ct  Dec.  23, 
designated  the  cities  in  which  Federal  reserve  banks  are  3.s  stat."  o..' 
to  be  organized,  and  fixed  the  geographical  limits  of  the  ^^^' 
Federal  reserve  districts,  every  national  banking  asso- 
ciation within  that  district  shall  be  required  within 
thirty  days  after  notice  from  the  organization  commit- 
tee, to  subscribe  to  the  capital  stock  of  such  Federal 
reserve  bank  in  a  sum  equal  to  six  per  centum  of  the 
paid-up  capital  stock  and  surplus  of  such  bank,  one- 
sixth  of  the  subscription  to  be  payable  on  call  of  the 
organization  committee  or  of  the  Federal  Reserve  Board, 
one-sixth  within  three  months  and  one-sixth  within  six 
months  thereafter,  and  the  remainder  of  the  subscrip- 
tion, or  any  part  thereof,  shall  be  subject  to  call  when 
deemed  necessary  by  the  Federal  Reserve  Board,  said 
payments  to  be  in  gold  or  gold  certificates. 

RESPONSIBILITY  OF  SHAREHOLDERS. 

602d.  The  shareholders  of  every  Federal  reserve  bankjgfl^*  sip-  'if: 
shall  be  held  individually  responsible,  equally  and  rata-  ^^  stat.  L', 
bly,  and  not  one  for  another,  for  all  contracts,  debts,  and 
engagements  of  such  bank  to  the  extent  of  the  amount 
of  their  subscriptions  to  such  stock  at  the  par  value 
thereof  in  addition  to  the  amount  subscribed,  whether 
such  subscriptions  have  been  paid  up  in  whole  or  in  part, 
under  the  provisions  of  this  Act. 

FAILURE  OF  NATIONAL  BANKS  TO  ACCEPT  TERMS  OF 
ACT— PENALTY. 

602e.  Any  national  bank  failing  to  signify  its  accept-  jt)-^|*  ^^^-  ~h 
ance  of  the  terms  of  this  Act  within  the  sixty  days  afore-  ss^  'stat.  *   £.! 
said,  shall  cease  to  act  as  a  reserve  agent,  upon  thirty  ~^"' 
days'  notice,  to  be  given  within  the  discretion  of  the  sail 
organization  committee  or  of  the  Federal  Reserve  Board. 

FAILURE    OF    NATIONAL    BANKS    TO    BECOME    MEMBER 
BANKS— PENALTY. 

602f.  Should  ajiy  national  banking  association  in  the     Act  Dec.  2s, 
United  States  now  organized  fail  within  one  year  after  as^'^'stltT'   I', 
the  passage  of  this  Act  to  become  a  member  bank  or  fail  -^^• 
to  comply  with  any  of  the  provisions  of  this  Act  appli- 
cable thereto,  all  of  the  rights,  privileges,  and  franchises 
)f  such  association  granted  to  it  under  the  nationai-bunk 
-let,  or  under  the  provisions  of  this  Act,  shall  be  tliereby 


122  THE   FEDERAL   KESER\^   ACT. 

forfeited.  Any  noncompliance  with  or  violation  of  this 
Act  shall,  however,  be  determined  and  adjudged  by  any 
court  of  the  United  States  of  competent  jurisdiction  in  a 
suit  brought  for  that  purpose  in  the  district  or  territory 
in  which  such  bank  is  located,  under  direction  of  the 
Federal  Reserve  Board,  by  the  Comptroller  of  the  Cur- 
rency in  his  own  name  before  the  association  shall  be 
declared  dissolved.  In  cases  of  such  noncompliance  or 
violation,  other  than  the  failure  to  become  a  member 
bank  under  the  provisions  of  this  Act,  every  director 
who  participated  in  or  assented  to  the  same  shall  be  held 
liable  in  his  personal  or  individual  capacity  for  all  dam- 
ages which  said  bank,  its  shareholclers,  or  any  other 
person  shall  have  sustained  in  consequence  of  such 
violation. 

Such  dissolution  shall  not  take  awaj  or  impair  any 
remedy  against  such  corporation,  its  stockholders  or 
officers,  for  any  liability  or  penalty  which  shall  have  been 
].reviously  incurred. 

PUBLIC  SUBSCRIPTIONS— WHEN  ACCEPTED. 

1913*  ?lc'  ^'^'  602g.  Should  the  subscriptions  by  banks  to  the  stock 
38  Stat. '  £.;  of  said  Federal  reserve  banks  or  any  one  or  more  of  them 
be,  in  the  judgment  of  the  organization  committee,  in- 
sufficient to  provide  the  amount  of  capital  required  there- 
for, then  and  in  that  event  the  said  organization  com- 
mittee may,  under  conditions  and  regulations  to  be  pre- 
scribed by  it,  offer  to  public  subscription  at  par  such 
an  amount  of  stock  in  said  Federal  reserve  banks,  or  any 
one  or  more  of  them,  as  said  committee  shall  determine, 
subject  to  the  same  conditions  as  to  payment  and  stock 
liability  as  provided  for  member  banks. 

LIMIT  TO  STOCK  HELD  BY  ANY  INDIVIDUAL,  COPART- 
NERSHIP, OR  CORPORATION  OTHER  THAN  A  MEMBER 
BANK.     PUBLIC  STOCK,  HOW  TRANSFERABLE. 

Act  Dec.  23,  602h.  No  individual,  copartnership,  or  corporation 
38^%tat.'^'  L.j  other  than  a  member  bank  of  its  district  shall  be  per- 
2^2-  mitted  to  subscribe  for  or  to  hold  at  any  time  more  than 

$25,000  par  value  of  stock  in  any  Federal  reserve  bank. 
Such  stock  shall  be  known  as  public  stock  and  may  be 
transferred  on  the  books  of  the  Federal  reserve  bank  by 
the  chairman  of  the  board  of  directors  of  such  bank. 

ALLOTMENT  OF  STOCK  TO  UNITED  STATES. 

Act  Dec.  23      6021.  Should  the  total  subscriptions  by  banks  and  the 

lyirf,     sec.    2;  .  ,  „        •i-r-<ii  i        i 

38     Stat.     L..  public  to  the  stock  oi  said  r  ederal  reserve  banks,  or  any 

^^^'  one  or  more  of  them,  be,  in  the  judgment  of  the  organiza- 

tion committee,  insufficient  to  provide  the  amount  of 
capital  required  therefor,  then  and  in  that  event  the  said 
organization  committee  shall  allot  to  the  United  States 
such  an  amount  of  said  stock  as  said  committee  shall  de- 


THE   FEDERAI.  RESERVE   ACT.  123 

termine.  Said  United  States  stock  shall  be  paid  for  at 
par  out  of  any  money  in  the  Treasury  not  otherwise  ap- 
propriated, and  shall  be  held  by  the  Secretary  of  the 
Treasury  and  disposed  of  for  the  benefit  of  the  United 
States  in  such  manner,  at  such  times,  and  at  such  price, 
not  less  than  par,  as  the  Secretary  of  the  Treasury  shall 
determine. 


VOTING  POWER. 


Dec.    23, 
sec.     2 : 


602 j.  Stock  not  held  by  member  banks  shall  not  be  en-  j^^ct 
titled  to  voting  power.  38_^  'stat.    l.. 

TRANSFER  OF  STOCK. 

602k.  The  Federal  Reserve  Board  is  hereby  em-  ^^Act  Dec.  23, 
powered  to  adopt  and  promulgate  rules  and  regulations  38  'stlt^  l.; 
governing  the  transfers  of  said  stock.  ^^^• 

MINIMUM  CAPITAL  OF  FEDERAL  RESERTE  BANK. 

6021.  No  Federal  reserve  bank  shall  commence  business  jg^l*  ^|^-  |^: 
with  a  subscribed  capital  less  than  $1,000,000.  38^^  stat.  •  l.; 

RESERVE  CITIES,  STATUS  OF. 

602m.  The  organization  of  reserve  districts  and  Federal  19^3*  ^1^:  ¥• 
reserve  cities  shall  not  be  construed  as  changing  the  ||g^  stat.    u, 
present  status  of  reserve  cities  and  central  reserve  cities, 
except  in  so  far  as  this  Act  changes  the  amount  of 
reserves   that   may   be  carried   with   approved   reserve 
agents  located  therein. 

AUTHORITY  OF  ORGANIZATION  COMMITTEE  TO  EMPLOY 

ASSISTANTS. 

602n.  The  organization  committee  shall  have  power  to  ^g^ct  Dec.  2|. 
appoint  such  assistants  and  incur  such  expenses  in  carry- ss    'stat.'  l.) 
ing  out  the  provisions  of  this  Act  as  it  shall  deem  neces- "    • 
sary,  and  such  expenses  shall  be  payable  by  the  Treasurer 
of  the  IJnited  States  upon  voucher  approved  by  the  Secre- 
tary of  the  Treasury,  and  the  sum  of  $100,000,  or  so 
much  thereof  as  may  be  necessary,  is  hereby  appropri- 
ated, out  of  any  moneys  in  the  Treasury  not  otherwise 
appropriated,  for  the  payment  of  such  expenses. 

BRANCH  OFFICES. 

BRANCHES  OF  FEDERAL  RESERVE  BANKS. 

603.  Sec.  3. — The  Federal  Reserve  Board  may  permit  or  ^  Act  Dec.  2^3. 
require  any  Federal  reserve  bank  to  establish  branch  38  'stat!^'  l.! 
banks  within  the  Federal  reserve  district  in  which  it  is  -^^-^j  j,,^^  21 
located  or  within  the  district  of  any  Federal  reserve  bank  i9i7,^^soc.  1 : 
which  may  have  been  suspended.     Such  branches,  sub-  232.  chap.  32." 


124  THE   FEDERAL  RESERVE  AC3T. 

ject  to  such  rules  and  regulations  as  the  Federal  Reserve 
Board  may  prescribe,  shall  be  operated  under  the  super- 
vision of  a  board  of  directors  to  consist  of  not  more  than 
seven  nor  less  than  three  directors,  of  whom  a  majority 
of  one  shall  be  appointed  by  the  Federal  reserve  bank  of 
the  district,  and  the  remaininor  directors  by  the  Federal 
Reserve  Board.  Directors  of  branch  banks  shall  hold 
oflBce  during  the  pleasure  of  the  Federal  Reserve  Board. 

FEDERAL  RESER\TE  BANKS. 

ORGANIZATION  OF  FEDERAL  RESERVE   BANKS.     APPLI- 
CATION FOR  STOCK  BY  NATIONAL  BANKS. 

1913*  ?ec'  ^4'  ^^^'  ^^^'  .^' — ^^^hen  the  organization  committee  shall 
38  'stat.  ■  L.',  have  established  Federal  reserve  districts  as  provided  in 
^^'*-  section  two  of  this  Act,  a  certificate  shall  be  filed  with  the 

Comptroller  of  the  Currency  showing  the  geographical 
limits  of  such  districts  and  the  Federal  reserve  city 
designated  in  each  of  such  districts.  The  Comptroller  of 
the  Currency  shall  thereupon  cause  to  be  forwarded  to 
each  national  bank  located  in  each  district,  and  to  such 
other  banks  declared  to  be  eligible  by  the  organization 
committee  which  may  apply  therefor,  an  application 
blank  in  form  to  be  approved  by  the  organization  com- 
mittee, which  blank  shall  contain  a  resolution  to  be 
adopted  by  the  board  of  directors  of  each  bank  executing 
such  application,  authorizing  a  subscription  to  the  capital 
stock  of  the  Federal  reserve  bank  organizing  in  that  dis- 
trict in  accordance  with  the  provisions  of  this  Act. 

ORGANIZATION  CERTIFICATE. 

19U*  ?ec;  ^4-  60^^'  When  the  minimum  amount  of  capital  stock  pre- 
254  ^**'*-  i^-'- scribed  by  this  Act  for  the  organization  of  any  Federal 
reserve  bank  shall  have  been  subscribed  and  allotted,  the 
organization  committee  shall  designate  any  five  banks 
of  those  whose  applications  have  been  received,  to 
execute  a  certificate  of  organization,  and  thereupon  the 
banks  so  designated  shall,  under  their  seals,  make  an 
organization  certificate  which  shall  specifically  state  the 
name  of  such  Federal  reserve  bank,  the  territorial  extent 
of  the  district  over  which  the  operations  of  such  Federal 
reserve  bank  are  to  be  carried  on,  the  city  and  State  in 
which  said  bank  is  to  be  located,  the  amount  of  capital 
stock  and  the  number  of  shares  into  wliich  the  same  is 
divided,  the  name  and  place  of  doing  business  of  each 
bank  executing  such  certificate,  and  of  all  banks  which 
have  subscribed  to  tlie  capital  stock  of  such  Federal  re- 
serve bank  and  the  number  of  shares  subscribed  by  each, 
and  the  fact  that  the  certificate  is  made  to  enable  those 
banks  executing  same,  and  all  banks  which  have  sub- 
scribed or  may  thereafter  subscribe  lo  the  capital  stock 
of  such  Federal  reserve  bank,  to  avail  themselves  of  the 
advantages  of  this  Act. 


THE  FEDERAL  RESERVE  ACT.  125 

The  said  org^anization  certificate  shall  be  acknowl- 
edged before  a  judge  of  some  court  of  record  or  notary 
public;  and  shall  be,  together  with  the  acknowledgement 
thereof,  authenticated  by  the  seal  of  such  court,  or  no- 
tary, transmitted  to  the  Comptroller  of  the  Currency, 
who  shall  file  record  and  carefully  preserve  the  same  in 
his  office. 

POWERS  OF  FEDERAL  RESERYE  BANKS. 

604b.  Upon    the   filing   of    such    certificate    with    the  ,„Act  dpc.  23 
Comptroller  of  the  Currencj'^  as  aforesaid,  the  said  Fed-  as  'stat.'   u, 
eral  reserve  bank  shall  become  a  body  corporate,  and  as  ^^*' 
such,  and  in  the  name  designated  in  such  organization 
certificate,  shall  have  power — 

First.  To  adopt  and  use  a  corporate  seal. 

Second.  To  have  succession  for  a  period  of  twenty 
years  from  its  organization  unless  it  is  sooner  dissolved 
by  an  Act  of  Congress,  or  unless  its  franchise  becomes 
forfeited  by  some  violation  of  law. 

Third.  To  make  contracts. 

Fourth.  To  sue  and  be  sued,  complain  and  defend,  in 
any  court  of  law  or  equity. 

Fifth.  To  appoint  by  its  board  of  directors  such  offi- 
cers and  employees  as  are  not  otherwise  provided  for  in 
this  act,  to  define  their  duties,  require  bonds  of  them  and 
fix  the  penalty  thereof,  and  to  dismiss  at  pleasure  such 
officers  or  emploj^ees. 

Sixth.  To  prescribe  by  its  board  of  directors,  by-laws, 
not  inconsistent  with  law,  regulating  the  manner  in 
which  its  general  business  may  be  conducted,  and  the 
privileges  granted  to  it  by  law  may  be  exercised  and 
enjoyed. 

Seventh.  To  exercise  by  its  board  of  directors,  or  duly 
authorized  officers  or  agents,  all  powers  specifically 
granted  by  the  provisions  of  this  act  and  such  incidental 
powers  as  shall  be  necessary  to  carry  on  the  business  of 
banking  within  the  limitations  prescribed  by  this  act. 

Eighth,^  Upon  deposit  with  the  Treasurer  of  the 
United  States  of  any  bonds  of  the  United  States  in  the 
manner  provided  by  existing  law  relating  to  national 
banks,  to  receive  from  the  Comptroller  of  the  Currency 
circulating  notes  in  blank,  registered  and  countersigned 
as  provided  by  law,  equal  in  amount  to  the  par  value  of 
the  bonds  so  deposited,  such  notes  to  be  issued  under  the 
same  conditions  and  provisions  of  law  as  relate  to  the 
issue  of  circulating  notes  of  national  banks  secured  by 
bonds  of  the  United  States  bearing  the  circulating  priv- 
ilege, except  that  the  issue  of  such  notes  shall  not  be 
limited  to  the  capital  stock  of  such  Federal  reserve  bank. 


*  See  section  IS.  Also  section  5  of  act  approved  Apr.  23.  1918, 
authorizing  issuance  of  Federal  Reserve  Bank  notes  in  any  de- 
nominations (including  .$1  and  $2)  against  security  of  United 
States  certificates  of  indebtedness. 


126  THE   FEDEKAL,  RESERVE   ACTT. 

But  no  Federal  reserve  bank  shall  transact  any  business 
except  such  as  is  incidental  and  necessarily  preliminary 
to  its  organization  until  it  has  been  authorized  by  the 
Comptroller  of  the  Currency  to  commence  business  under 
the  provisions  of  this  act. 

DIRECTORS  OF  FEDERAL  RESERTE  BANKS. 

lofs,*  sec."  ^i;     604c.  Every  Federal  reserve  bank  shall  be  conducted 
255  ^*^*'    ^ '  ^^^^r  ^he  supervision  and  control  of  a  board  of  directors. 
The  board  of  directors  shall  perform  the  duties  usually 
appertaining  to  the  office  of  directors  of  banking  associa- 
tions and  all  such  duties  as  are  prescribed  by  law. 

Said  board  shall  administer  the  affairs  of  said  bank 
fairly  and  impartially  and  without  discrimination  in 
favor  of  or  against  any  member  bank  or  banks  and  shall, 
subject  to  the  pro\asions  of  law  and  the  orders  of  the 
Federal  Reserve  Board,  extend  to  each  member  bank 
such  discounts,  advancements  and  accommodations  as 
may  be  safely  and  reasonably  made  with  due  regard  for 
the  claims  and  demands  of  other  member  banks. 

CLASSIFICATION  OF  DIRECTORS. 

1913!  ^ec.'  ^4-  604d.  Such  board  of  directors  shall  be  selected  as  here- 
255  '^*^**  ^"  i^^ft^i'  specified  and  shall  consist  of  nine  members,  hold- 
ing office  for  three  years,  and  divided  into  three  classes, 
designated  as  classes  A,  B,  and  C. 

Class  A  shall  consist  of  three  members,  who  shall  be 
chosen  by  and  be  representative  of  the  stock-holding 
banks. 

Class  B  shall  consist  of  three  members,  who  at  the  time 
of  their  election  shall  be  actively  engaged  in  their  dis- 
trict in  commerce,  agriculture  or  some  other  industrial 
pursuit. 

Class  C  shall  consist  of  three  members  who  shall  be 
designated  by  the  Federal  Reserve  Board.  When  the 
necessary  subscriptions  to  the  capital  stock  have  been 
obtained  for  the  organization  of  any  Federal  reserve 
bank,  the  Fedei^^l  Reserve  Board  shall  appoint  the  class 
C  directors  and  shall  designate  one  of  such  directors  as 
chairman  of  the  board  to  be  selected.  Pending  the  desig- 
nation of  such  chairman,  the  organization  committee 
shall  exercise  the  powers  and  duties  appertaining  to  the 
office  of  chairman  in  the  organization  of  such  Federal 
reserve  bank. 

No  Senator  or  Representative  in  Congress  shall  be  a 
member  of  the  Federal  Reserve  Board  or  an  officer  or  a 
director  of  a  Federal  reserve  bank. 

No  director  of  class  B  shall  be  an  officer,  director,  or 
employee  of  any  bank. 

No  director  of  class  C  shall  be  an  officer,  director, 
employee,  or  stockholder  of  any  bank. 


THE   FEDERAL   RESERVE   ACT.  127 

ELECTION  OF  CLASS  A  AND  CLASS  B  DIRECTORS. 

604e.  Directors  of  class  A  and  class  B  shall  be  chosen  j^^^*  ^|^;  ^^) 
in  the  following  manner :  38^  stat.     l., 

The  Federal  Reserve  Board  shall  classify  the  member 
banks  of  the  district  into  three  general  groups  or  divi- 
sions, designating  each  group  by  number.  Each  group 
shall  consist  as  nearly  as  may  be  of  banks  of  similar 
capitalization.  Each  member  bank  shall  be  permitted  to  ^ct  Sept  26, 
nominate  to  the  chairman  of  the  board  of  directors  of  I9i8- 
the  Federal  reserve  bank  of  the  district  one  candidate  for 
director  of  class  A  and  one  candidate  for  director  of  class 
B.  The  candidates  so  nominated  shall  be  listed  by  the 
chairman,  indicating  by  whom  nominated,  and  a  copy  of 
said  list  shall,  within  fifteen  days  after  its  completion,  be 
furnished  by  the  chairman  to  each  member  bank.  Each 
member  bank  by  a  resolution  of  the  board  or  by  an 
amendment  to  its  by-laws  shall  authorize  its  president, 
cashier,  or  some  other  officer  to  cast  the  vote  of  the  mem- 
ber bank  in  the  elections  of  class  A  and  class  B  directors. 

Within  fifteen  days  after  receipt  of  the  list  of  candi- 
dates the  duly  authorized  officer  of  a  member  bank  shall 
certify  to  the  chairman  his  first,  second,  and  other  choices 
for  director  of  class  A  and  class  B,  respectively,  upon 
a  preferential  ballot  upon  a  form  furnished  by  the  chair- 
man of  the  board  of  directors  of  the  Federal  reserve 
bank  of  the  district.  Each  such  officer  shall  make  a 
cross  opposite  the  name  of  the  first,  second,  and  other 
choices  for  a  director  of  class  A  and  for  a  director  of 
class  B,  but  shall  not  vote  more  than  one  choice  for  any 
one  candidate.  No  officer  or  director  of  a  member  bank 
shall  be  eligible  to  serve  as  a  class  A  director  unless  nomi- 
nated and  elected  by  banks  which  are  members  of  the 
same  group  as  the  member  bank  of  which  he  is  an  officer 
or  director. 

Any  person  who  is  an  officer  or  director  of  more  than 
one  member  bank  shall  not  be  eligible  for  nomination  as 
a  class  A  director  except  by  banks  in  the  same  group  as 
the  bank  having  the  largest  aggregate  resources  of  any 
of  those  of  which  such  person  is  an  officer  or  director. 

Any  candidate  having  a  majority  of  all  votes  cast  in 
the  column  of  first  choice  shall  be  declared  elected.  If 
no  candidate  have  a  majority  of  all  the  votes  in  the  first 
column,  then  there  shall  be  added  together  the  votes 
cast  by  the  electors  for  such  candidates  in  the  second  col- 
umn and  the  votes  cast  for  the  several  candidates  in  the 
first  column.  If  any  candidate  then  have  a  majority  of 
the  electors  voting,  by  adding  together  the  first  and 
second  choices,  he  shall  be  declared  elected.  If  no  can- 
didate have  a  majority  of  electors  voting  when  the  first 
and  second  choices  shall  have  been  added,  then  the  votes 
cast  in  the  third  column  for  other  choices  shall  be  added 
together  in  like  manner,  and  the  candidate  then  having 


128  THE   FEDERAL  RESERVE   ACT. 

the  highest  number  of  votes  shall  be  declared  elected. 
An  immediate  report  of  election  shall  be  declared. 

APP0INT3IENT  OF  CLASS  C  DIRECTORS.     FEDERAL  RE 
SERVE  AGENTS,  DUTIES  OF. 

19I3!  ^tc.  f ;  604f.  Class  C  directors  shall  be  appointed  by  the  Fed- 
38  Stat.  L.',  eral  Eeserve  Board.  They  shall  have  been  for  at  least 
two  years  residents  of  the  district  for  which  they  are  ap- 
pointed, one  of  whom  shall  be  designated  by  said  board 
as  chairman  of  the  board  of  directors  of  the  Federal  re- 
jg-^^*g^^"|  21.  serve  bank  and  as  'Federal  reserve  agent.'  Ke  shall  be  a 
person  of  tested  banking  experience,  and  in  addition  to 
his  duties  as  chairman  of  the  board  of  directors  of  the 
Federal  reserve  bank  he  shall  be  required  to  maintain, 
under  regulations  to  be  established  by  the. Federal  Re- 
serve Board,  a  local  office  of  said  board  on  the  premises 
of  the  Federal  reserve  bank.  He  shall  make  regular  re- 
ports to  the  Federal  Reserve  Board  and  shall  act  as  its 
official  representative  for  the  performance  of  the  func- 
tions conferred  upon  it  by  this  act.  He  shall  receive  an 
annual  compensation  to  be  fixed  by  the  Federal  Reserve 
Board  and  paid  monthly  by  the  Federal  reserve  bank  to 
which  he  is  designated.  One  of  the  directors  of  class  C 
shall  be  appointed  by  the  Federal  Reserve  Board  as 
deputy  chairman  to  exercise  the  powers  of  the  chairman 
of  the  board  when  necessary.  In  case  of  the  absence  of 
the  chairman  and  deputy  chairman,  the  third-class  C 
director  shall  preside  at  meetings  of  the  board. 

Subject  to  the  approval  of  the  Federal  Reserve  Board, 
the  Federal  reserve  agent  shall  appoint  one  or  more,  as- 
sistants. Such  assistants,  who  shall  be  persons  of  tested 
banking  experience,  shall  assist  the  Federal  reserve  agent 
in  the  performance  of  his  duties  and  shall  also  have 
power  to  act  in  his  name  and  stead  during  his  absence  or 
disability.  The  Federal  Reserve  Board  shall  require 
such  bonds  of  the  assistant  Federal  reserve  agents  as  it 
may  deem  necessary  for  the  protection  of  the  United 
States.  Assistants  to  the  Federal  reserve  agent  shall  re- 
ceive an  annual  compensation,  to  be  fixed  and  paid  in 
the  same  manner  as  that  of  the  Federal  reserve  agent. 

COMPENSATION  OF  DIRECTORS. 


257. 


191?}  ^fic"  ^4-  ^^^S-  Directors  of  Federal  reserve  banks  shall  receive, 
38  "'stat,'  L.',  in  addition  to  any  compensation  otherwise  provided,  a 
reasonable  allowance  for  necessary  expenses  in  attend- 
ing meetings  of  their  respective  boards,  Avhich  amount 
shall  be  paid  by  the  respective  Federal  reserve  banks. 
Any  compensation  that  may  be  provided  by  boards  of 
directors  of  Federal  reserve  banks  for  directors,  officers 
or  employees  shall  be  subject  to  the  approval  of  the  Fed- 
eral Reserve  Board. 


THE   FEDERAL  RESERVE  ACT.  129 

ORGANIZATION     OF     FEDERAL     RESERTE     BANKS.     AU- 
THORITY OF  ORGANIZATION  COMMITTEE. 

604h.  The  Reserve  Bank  Organization  Committee  may,  ^^^^  ^|^-  23. 
in  organizing  Federal  reserve  banks,  call  such  meetings  38     fetat. '  l.| 
of  bank  directors  in  the  several  districts  as  may  be  neces-  ^^" 
sary  to  carry  out  the  purposes  of  this  Act,  and  may 
exercise  the  functions  herein  conferred  upon  the  chair- 
man of  the  board  of  directors  of  each  Federal  reserve 
bank  pending  the  complete  organization  of  such  bank. 

FIRST     MEETING     OF     DIRECTORS.      DESIGNATION     OF 
TERMS  OF  OFFICE. 

6041.  At  the  first  meeting  of  the  full  board  of  directors     Act  Dec.  23, 
of  each  Federal  reserve  bank,  it  shall  be  the  duty  of  the  ss    stat^'  l.) 
directors  of  classes  A,  B  and  C.  respectively,  to  designate  ^^^" 
one  of  the  members  of  each  class  whose  term  of  office 
shall  expire  in  one  jeixr  from  the  first  of  January  nearest 
the  date  of  such  meeting,  one  whose  term  of  office  shall 
expire  at  the  end  of  two  years  from  said  date,  and  one 
whose  term  of  office  shall  expire  at  the  end  of  three  years 
from  said  date.    Thereafter  every  director  of  a  Federal 
reserve  bank  chosen  as  hereinbefore  provided  shall  hold 
office  for  a  term  of  three  years.     Vacancies  that  may 
occur  in  the  several  classes  of  directors  of  Federal  reserve 
banks  may  be  filled  in  the  manner  provided  for  the  origi- 
nal selection  of  such  directors,  such  appointees  to  hold 
office  for  the  unexpired  terms  of  their  predecessors. 

STOCK  ISSUES ;  INCREASE  AND  DECREASE  OF  CAPITAL. 

INCREASE  ANT)  DECREASE  OF  CAPITAL  STOCK. 

605.  Sec.  5.— The  capital  stock  of  each  Federal  reserve  jg^^  ^|^-  ^f: 
bank  shall  be  divided  into  shares  of  $100  each.  The  out-  38^  stat"  l.! 
standing  capital  stock  shall  be  increased  from  time  to 
time  as  member  banks  increase  their  capital  stock  and 
surplus  or  as  additional  banks  become  members,  and  may 
be  decreased  as  member  banks  reduce  their  capital  stock 
or  surplus  or  cease  to  be  members. 

STOCK  NOT  TRANSFERABLE. 

605a.  Shares  of  the  capital  stock  of  Federal  reserve  ^^  Dec.  23. 
banks  owned  by  member  banks  shall  not  be  transferred  .^s^^stat*'  l.! 
or  hypothecated.  257. 

INCREASE  OF  CAPITAL  STOCK. 

605b.  When  a  member  bank  increases  its  capital  stock    j^ct  Dec.  23. 
or  surplus,  it  shall  thereupon  subscribe  for  an  additional  ;^s    stltf'  H 
amount  of  capital  stock  of  the  Federal  reserve  bank  of  ^^'^- 
its  district  equal  to  six  per  centum  of  the  said  increase, 
one-half  of  said  subscription  to  be  paid  in  the  manner 
hereinbefore  provided  for  original  subscription,  and  one- 
half  subject  to  call  of  the  Federal  Reserve  Board. 
ie43l2°— 20 9 


257. 


130 


THE  FEDERAL,  EESERVE   ACT. 


Act   Dec. 
1913,     sec. 


38 
257. 


Stat. 


APPLICATIONS  FOR  CAPITAL  STOCK. 

2^3,  605c.  A  bank  applying  for  stoek  in  a  Federal  reserve 
L,;  bank  at  any  time  after  the  organization  thereof  must  sub- 
scribe for  an  amount  of  the  capital  stock  of  the  Federal 
reserve  bank  equal  to  six  per  centum  of  the  paid-up  capi- 
tal stock  and  surplus  of  said  applicant  bank,  paying 
therefor  its  par  value  plus  one-half  of  one  per  centum 
a  month  from  the  period  of  the  last  dividend. 

CERTIFICATE  OF  INCREASE  IN  STOCK  OF  FEDERAL  RE- 
SERVE BANK. 


Act   Dec.   23, 
1913,     sec.     5 


38 
257. 


Stat. 


Act  Dec. 
1913.     sec. 
38 
257. 


Stat. 


605d.  When  the  capital  stock  of  any  Federal  reserve 
£.',  bank  shall  have  been  increased  either  on  account  of  the 
increase  of  capital  stock  of  member  banks  or  on  account 
of  the  increase  in  the  number  of  member  banks,  the  board 
of  directors  shall  cause  to  be  executed  a  certificate  to  the 
Comptroller  of  the  Currency  showing  the  increase  in 
capital  stock,  the  amount  paid  in,  and  by  whom  paid. 

REDUCTION  OF  CAPITAL  STOCK. 

2^^:  605e.  When  a  member  bank  reducas  its  capital  stock  it 
L.)  shall  surrender  a  proportionate  amount  of  its  holdings 
in  the  capital  of  said  Federal  reserve  bank,  and  when  a 
member  bank  voluntarily  liquidates  it  shall  surrender  all 
of  its  holdings  of  the  capital  stock  of  said  Federal  reserve 
bank  and  be  released  from  its  stock  subscription  not  pre- 
viously called.  In  either  case  the  shares  surrendered 
shall  be  canceled  and  the  member  bank  shall  receive  in 
payment  therefor,  under  regulations  to  be  prescribed  by 
the  Federal  Reserve  Board,  a  sum  equal  to  its  cash-paid 
subscriptions  on  the  shares  surrendered  and  one-half  of 
one  per  centum  a  month  from  the  period  of  the  last  divi- 
dend, not  to  exceed  the  book  value  thereof,  less  any  lia- 
bility of  such  member  bank  to  the  Federal  reserve  bank. 


INSOLTENCT  OF  MEMBER  BANK. 


Act   Dec.   23, 
1913,     sec.     ' 
38      Stat. 
258. 


g ,  606.  Sec.  6. — If  any  member  bank  shall  be  declared  in- 
L.;  solvent  and  a  receiver  appointed  therefor,  the  stock  held 
by  it  in  said  Federal  reserve  bank  shall  be  canceled,  with- 
out impairment  of  its  liability,  and  all  cash-paid  sub- 
scriptions on  said  stock,  with  one-half  of  one  per  centum 
per  month  from  the  period  of  last  dividend,  not  to  ex- 
ceed the  book  value  thereof,  shall  be  first  applied  to  all 
debts  of  the  insolvent  member  bank  to  the  Federal  re- 
serve bank,  and  the  balance,  if  any,  shall  be  paid  to  the 
receiver  of  the  insolvent  bank.  Whenever  the  capital 
stock  of  a  Federal  reserve  bank  is  reduced,  either  on  ac- 
count of  a  reduction  in  capital  stock  of  any  member  bank 
or  of  the  liquidation  or  insolvency  of  such  bank,  the 
board  of  directors  shall  cause  to  be  executed  a  certificate 
to  the  Comptroller  of  the  Currency  showing  such  reduc- 
tion of  capital  stock  and  the  amount  repaid  to  such  bank. 


THE   FEDERAL  RESERVE  AOT.  131 

DITISION  OF  EARNINGS. 

607.  Sec.  7. — After  all  necessary  expenses  of  a  Federal  ^j^^ct  Dec.  2^3. 
reserve  bank  have  been  paid  or  provided  for,  the  stock-  38  'stat!^'  l.', 
holders  shall  be  entitled  to  receive  an  annual  dividend  of  ^^^' 

six  per  centum  on  the  paid-in  capital  stock,  which  divi- 
dend shall  bo  cumulative. 

After  the  aforesaid  dividend  claims  have  been  fully  ^qI^^^  ^"'  ^' 
met,  the  net  earnings  shall  be  paid  to  the  United  States 
as  a  franchise  tax  except  that  the  whole  of  such  net 
earnings,  including  those  for  the  year  ending  December 
thirty-first,  nineteen  hundred  and  eighteen,  shall  be  paid 
into  a  surplus  fund  until  it  shall  amount  to  one  hundred 
per  centum  of  the  subscribed  capital  stock  of  such  bank, 
and  that  thereafter  ten  per  centum  of  such  earnings  shall 
be  paid  into  the  surj^lus. 

The  net  earnings  derived  by  the  United  States  from 
Federal  reserve  banks  shall,  in  the  discretion  of  the  Secre- 
tary, be  used  to  supplement  the  gold  reserve  held  against 
outstanding  United  States  notes,  or  shall  be  applied  to 
the  reduction  of  the  outstanding  bonded  indebtedness  of 
the  United  States  under  regulations  to  be  prescribed  by 
the  Secretary  of  the  Treasury.  Should  a  Federal  reserve 
bank  be  dissolved  or  go  into  liquidation,  any  surplus  re- 
maining, after  the  payment  of  all  debts,  dividend  require- 
n.ents  as  hereinbefore  provided,  and  the  par  value  of  the 
stock,  shall  be  paid  to  and  become  the  property  of  the 
United  States  and  shall  be  similarly  applied. 

TAX  EXEMPTIONS. 

607a.  Federal  reserve  banks,  including  the  capital  stock  j^^^t  Dec.  2S, 
and  surplus  therein,  and  the  income  derived  therefrom  38    'stat. '  l.', 
shall  be  exempt  from  Federal,  State,  and  local  taxation,  ^^®* 
except  taxes  upon  real  estate. 

CONVERSION  OF  STATE  BANKS  INTO  NATIONAL  BANKS. 

608.  Sec.  8.— Section  fifty-one  hundred  and  fifty-four,  ^g^ct  June  ^3. 
United  States  Revised  Statutes,  is  hereby  amended  to  sec.  '  44;  li 
read  as  follows :  \  ^Tct  ^Dec.^ls. 

Any  bank  incorporated  by  special  law  of  any  State  or  3|^"^'gt^|^*  £j 
of  the  United  States  or  organized  under  the  general  laws  258. 
of  any  State  or  of  the  United  States  and  having  an  unim- 
paired capital  sufficient  to  entitle  it  to  become  a  national 
banking  association  under  the  provisions  of  the  existing 
laws  may,  ^  y  the  vote  of  the  shareholders  owning  not  less 
than  fifty-one  per  centum  of  the  capital  stock  of  such 
bank  or  banking  association,  with  the  approval  of  the 
Comptroller  of  the  Currency  be  converted  into  a  national 
banking  association,  with  any  name  approved  by  the 
Comptroller  of  the  Currency:  Provided,  however,  That 


132  THE  FEDERAL  RESERVE  ACT. 

said  conversion  shall  not  be  in  contravention  of  the  State 
law.  In  such  case  the  articles  of  association  and  organi- 
zation certificate  may  be  executed  by  a  majority  of  the 
directors  of  the  bank  or  banking  institution,  and  the  cer- 
tificate shall  declare  that  the  owners  of  fifty-one  per 
centum  of  the  capital  stock  have  authorized  the  directors 
to  make  such  certificate  and  to  change  or  convert  the 
bank  or  banking  institution  into  a  national  association. 
A  majority  of  the  directors,  after  executing  the  articles  of 
association  and  the  organization  certificate,  shall  have 
power  to  execute  all  other  papers  and  to  do  whatever  may 
be  required  to  make  its  organization  perfect  and  com- 
plete as  a  national  association.  The  shares  of  any  such 
bank  may  continue  to  be  for  the  same  amount  each  as  they 
were  before  the  conversion,  and  the  directors  may  con- 
tinue to  be  the  directors  of  the  association  until  others  are 
elected  or  appointed  in  accordance  with  the  provisions  of 
the  statutes  of  the  United  States.  AVhen  the  Comptroller 
has  given  to  such  bank  or  banking  association  a  certificate 
that  the  provisions  of  this  Act  have  been  complied  with, 
such  bank  or  banking  association,  and  all  its  stockholders, 
officers,  and  employees,  shall  have  the  same  powers  and 
privileges,  and  shall  be  subject  to  the  same  duties,  lia- 
bilities, and  regulations,  in  all  respects,  as  shall  have 
been  prescribed  by  the  Federal  Reserve  Act  and  by  the 
national  banking  Act  for  associations  originally  organized 
as  national  banking  associations. 

STATE  RANKS  AS  MEMBERS. 

STATE  BANKS  MAY  SUBSCRIBE. 

Act  Dec.  23,     609.  Sec.  9. — Any  bank  incorporated  by  special  law  of 
38^^'stat!^'   L.i  any  State,  or  organized  under  the  general  laws  of  any 
^^Act  June  21  State  or  of  the  United  States,  desiring  to  become  a  mem- 
1917,    sec.    3 ;  ber  of  the  Federal  Reserve  System,  may  make  application 
232,  ^^^^    ^"  to  the  Federal  Reserve  Board,  under  such  rules  and  regu- 
lations as  it  may  prescribe,  for  the  right  to  subscribe  to 
the  stock  of  the  Federal  reserve  bank  organized  within 
the  district  in  which  the  applying  bank  is  located.    Such 
application  shall  be  for  the  same  amount  of  stock  that 
the  applying  bank  would  be  required  to  subscribe  to  as 
a  national  bank.     The  Federal  Reserve  Board,  subject 
to  such  conditions  as  it  may  prescribe,  may  permit  the 
applying  bank  to  become  a  stockholder  of  such  Federal 
reserve  bank. 

APPLICATIONS  FOR  MEMBERSHIP. 

,^^^^  ^^^A  ^^A      609a.  In   acting  upon   such   applications  the  Federal 

1913,  sec.  9;  38  „  -p,  1^11  -i         -1     ^ />  •    i  tj."  £ 

Stat.  L.,  259.    Rcscrve  Board  sJiall  consider  the  financial  condition  01 
iftiT,'  Beir^a?^'  the  applying  bank,  the  general  character  of  its  manage- 
ment, and  whether  or  not  the  corporate  powers  exercised 
are  consistent  with  the  purposes  of  this  act. 


THE  FEDERAL  RESERVE  ACT.  133 

"WHienever  the  Federal  Reserve  Board  shall  permit 
the  applying  bank  to  become  a  stockholder  in  the  Fed- 
eral reserve  bank  of  the  district  its  stock  subscription 
shall  be  payable  on  call  of  the  .Federal  Reserve  Board, 
and  stock  issued  to  it  shall  be  held  subject  to  the  pro- 
visions of  this  act. 

REGULATIONS  AND  EESTRICTIONS. 

609b.  All  banks  admitted  to  membership  under  '^"thor- ^^Act^Dec^  23^ 
ity  of  this  section  shall  be  required  to  comply,  with  the  stat.' l.,  259. 
reserve  and  capital  requirements  of  this  act  and  to  con- 
form to  those  provisions  of  law   imposed  on  national  i^f^' g-^^^l -^• 
banks  which  prohibit  such  banks  from  lending  on  or 
purchasing  their  own  stock,  which  relate  to  the  with- 
drawal or  impairment  of  their  capital  stock,  and  which 
relates  to  the  payment  of  unearned  dividends. 

MEMBER  BANKS  REQUIRED  TO  MAKE  REPORTS  TO  FED- 
ERAL RESERVE  BOARD  AND  SUBJECT  TO  EXAMINA- 
TION BY  EXAMINERS  APPOINTED  BY  THE  BOARD  AND 
SUCH  BANKS'  OFFICERS,  AGENTS.  AND  EMPLOYEES 
SUBJECT  TO  PENALTIES  OF   SECTION  5209. 

609c.  Such  banks  and  the  officers,  agents,  and  employees  ^^^^t  Dec.  2^3, 
thereof  shall  also  be  subject  to  the  provisions  of  and  toss    'stat.'   l.', 
the  penalties  prescribed  by  section  fifty-two  hundred  and  -'^^• 
nine  of  the  Revised  Statutes,  and  shall  be  required  to     ^^^  ^^^^  ^^ 
make  reports  of  condition  and  of  the  payment  of  divi- 1917,  sec.  3." 
dends  to  the  Federal  reserve  bank  of  which  they  become 
a  member.     Not  less  than  three  of  such  reports  shall  be 
made  annually  on  call  of  the  Federal  reserve  bank  on 
dates  to  be  fixed  by  the  Federal  Reserve  Board.    Failure 
to  make  such  reports  within  ten  days  after  the  date  they 
are  called  for  shall  subject  the  offending  bank  to  a  penalty 
of  $100  a  day  for  each  day  that  it  fails  to  transmit  such 
report;  such  penalty  to  be  collected  by  the  Federal  re- 
serve bank  by  suit  or  otherwise. 

As  a  condition  of  membership  such  banks  shall  like- 
wise be  subject  to  examinations  made  by  direction  of  the 
Federal  Reserve  Board  or  of  the  Federal  reserve  bank  by 
examiners  selected  or  approved  by  the  Federal  Reserve 
Board. 

Whenever  the  directors  of  the  Federal  reserve  bank 
shall  approve  the  examinations  made  by  the  State 
authorities,  such  examinations  and  the  reports  thereof 
may  be  accepted  in  lieu  of  examinations  made  by  exam- 
iners selected  or  approved  by  the  Federal  Reserve  Board : 
Provided^  however^  That  when  it  deems  it  necessary  the 
board  may  order  special  examinations  by  examiners  of  its 
own  selection  and  shall  in  all  cases  approve  the  form  of  the 
report.  The  expenses  of  all  examinations,  other  than 
those  made  by  State  authorities,  shall  be  assessed  against 
and  paid  by  the  banks  examined. 


134  THE  FEDERAL  RESERVE  ACT. 

FAILURE  TO  COMPLY  WITH  REGULATIONS— PENALTY. 

Act  Dec.  23,  609d.  If  at  any  time  it  shall  appear  to  the  Federal  Re- 
38^^'stlt'  L.;  serve  Board  that  a  member  bank  has  failed  to  comply 
260.  '  -with  the  provisions  of  this  section  or  the  regulations  of 

\ct  June  21  ^hc  Federal  Eeserve  Board  made  pursuant  thereto,  it 
1917,  sec.  3."  '  shall  be  within  the  power  of  the  board  after  hearing  to 
require  such  bank  to  surrender  its  stock  in  the  Federal 
reserve  bank  and  to  forfeit  all  rights  and  privileges  of 
membership.  The  Federal  Reserve  Board  may  restore 
membership  upon  due  proof  of  compliance  with  the  con- 
ditions unposed  by  this  section. 

WITHDRAWAL    FROM    MEMBERSHIP    IN    FEDERAL    RE- 
SERYE   BANK  BY  STATE   BANK  OR   TRUST  COMPANY. 

Act  JuDe^2i,  609e.  Any  State  bank  or  trust  company  desiring  to 
''  ^^^'  ■  withdraw  from  membership  in  a  Federal  reserve,  bank 
may  do  so,  after  six  months'  written  notice  shall  have 
been  filed  with  the  Federal  Reserve  Board,  upon  the  sur- 
render and  cancellation  of  all  of  its  holdings  of  capital 
stock  in  the  Federal  reserve  bank:  Provided^  however^ 
That  no  Federal  reserve  bank  shall,  except  under  express 
authority  of  the  Federal  Reserve  Board,  cancel  within  the 
same  calendar  year  more  than  twenty-five  per  centum  of 
its  capital  stock  for  the  purpose  of  effecting  voluntary 
withdrawals  during  that  year.  All  such  applications 
shall  be  dealt  with  in  the  order  in  which  they  are  filed 
with  the  board.  Whenever  a  member  bank  shall  surrender 
its  stock  holdings  in  a  Federal  reserve  bank,  or  shall  be 
ordered  to  do  so  by  the  Federal  Reserve  Board,  under 
authority  of  law,  all  of  its  rights  and  privileges  as  a 
member  bank  shall  thereupon  cease  and  determine,  and 
after  due  provision  has  been  made  for  any  indebtedness 
due  or  to  become  due  to  the  Federal  reserve  bank  it  shall 
be  entitled  to  a  refund  of  its  cash  paid  subscription  with 
interest  at  the  rate  of  one-half  of  one  per  centum  per 
month  from  date  of  last  dividend,  if  earned,  the  amount 
refunded  in  no  event  to  exceed  the  book  value  of  the  stock 
at  that  time,  and  shall  likewise  be  entitled  to  repayment 
of  deposits  and  of  any  other  balance  due  from  the  Fed- 
eral reserve  bank. 

AMOUNT    OF    CAPITAL    REQUIRED    TO    ENABLE    STATE 
BANK  TO  BECOME  MEMBER  BANK. 

Act  Dec.  23,     609f.  No  applying  bank  shall  be  admitted  to  member- 
38^^'stlt!^'   L.;  ship  in  a  Federal  reserve  bank  unless  it  possesses  a  paid- 
^^Act  June  21  "P?  Unimpaired  capital  sufficient  to  entitle  it  to  become  a 
1917,  sec.  3.  '  national  banking  association  in  the  place  where  it  is  situ- 
ated under  the  provisions  of  the  national-bank  act. 


THE  FEDERAL  RESERVE  ACT.  135 

RIGHTS,  POWERS,   AND  LIABILITIES  OF   STATE  BANKS 
WHICH  BECOME  MEMBER  BANKS. 

609g.  Banks  becoming  members  of  the  Federal  Reserve  1917*  sic"!.^^ 
System  mider  authority  of  this  section  shall  be  subject 
to  the  provisions  of  this  section  and  to  those  of  this 
act  which  relate  specifically  to  member  banks,  but  shall 
not  be  subject  to  examination  under  the  provisions  of  the 
first  two  paragraphs  of  section  fifty-two  hundred  and 
forty  of  the  Revised  Statutes  as  amended  by  section 
twenty-one  of  this  act.^  Subject  to  the  provisions  of  this 
act  and  to  the  regulations  of  the  board  made  pursuant 
thereto,  any  bank  becoming  a  member  of  the  Federal 
Reserve  System  shall  retain  its  full  charter  and  statutory 
rights  as  a  State  bank  or  trust  company,  and  may  con- 
tinue to  exercise  all  corporate  powers  granted  it  by  the 
State  in  which  it  was  created,  and  shall  be  entitled  to  all 
privileges  of  member  banks:  Provided.,  hoioever.,  That  no 
Federal  reserve  bank  shall  be  permitted  to  discount  for 
any  State  bank  or  trust  company  notes,  drafts,  or  bills  of 
exchange  of  any  one  borrower  who  is  liable  for  borrowed 
money  to  such  State  bank  or  trust  company  in  an  amount 
greater  than  ten  per  centum  of  the  capital  and  surplus  of 
such  State  bank  or  trust  company,  but  the  discount  of 
bills  of  exchange  drawn  against  actually  existing  value 
and  the  discount  of  commercial  or  business  paper  actually 
owned  by  the  person  negotiating  the  same  shall  not  be 
considered  as  borrowed  money  within  the  meaning  of  this 
section.  The  Federal  reserve  bank,  as  a  condition  of  the 
discount  of  notes,  drafts,  and  bills  of  exchange  for  such 
State  bank  or  trust  company,  shall  require  a  certificate  or 
guaranty  to  the  effect  that  the  borrower  is  not  liable  to 
such  bank  in  excess  of  the  amount  provided  by  this  sec- 
tion, and  will  not  be  permitted  to  become  liable  in  excess 
of  this  amount  while  such  notes,  drafts,  or  bills  of  ex- 
change are  under  discount  with  the  Federal  reserve  bank. 

It  shall  be  unlawful  for  any  officer,  clerk,  or  agent  of 
any  bank  admitted  to  membership  under  authority  of  this 
section  to  certify  any  check  drawn  upon  such  bank  unless 
the  person  or  company  drawing  the  check  has  on  deposit 
therewith  at  the  time  such  check  is  certified  an  amount  of 
money  equal  to  the  amount  specified  in  such  check.  Any 
check  so  certified  by  duly  authorized  officers  shall  be  a 
good  and  valid  obligation  against  such  bank,  but  the  act 
of  any  such  officer,  clerk,  or  agent  in  violation  of  this 
section  may  subject  such  bank  to  a  forfeiture  of  its  mem- 
bership in  the  Federal  Reserve  System  upon  hearing  by 
the  Federal  Reserve  Board. 

*  AmeudiutJ  sectiou  21  of  this  act. 


136  the  federal  reserve  act. 

Federal  Eesek\'e  Board. 

APPOINTMENT,     COMPENSATION,     AND     QUALIFICATION 
OF  MEMBERS  OF  FEDERAL  RESERTE  BOARD. 

Act  Dec.  23,  g^Q.  Sec.  10. — A  Federal  Reserve  Board  is  hereby  cre- 
ss sutl'  L.iated  which  shall  consist  of  seven  members,  including 
^®*^-  the  Secretary  of  the  Treasury  and  the  Comptroller  of  the 

Currency,  who  shall  be  members  ex  officio,  and  live  mem- 
bers appointed  by  the  President  of  the  United  States,  by 
and  with  the  advice  and  consent  of  the  Senate.  In 
selecting  the  five  appointive  members  of  the  Federal  Re- 
serve Board,  not  more  than  one  of  whom  shall  be  selected 
from  any  one  Federal  reserve  district,  the  President  shall 
have  due  regard  to  a  fair  representation  of  the  dilierent 
commercial,  industrial  and  geographical  divisions  of  the 
country.  The  five  members  of  the  Federal  Reserve 
Board  appointed  by  the  President  and  confirmed  as  afore- 
said shall  devote  their  entire  time  to  the  business  of  the 
Federal  Reserve  Board  and  shall  each  receive  an  annual 
salary  of  $12,000,  payable  monthly  together  with  actual 
necessary  traveling  expenses,  and  the  Comptroller  of  the 
Currency,  as  ex  officio  member  of  the  Federal  Reserve 
Board,  shall,  in  addition  to  the  salary  now  paid  him  as 
Comptroller  of  the  Currency,  receive  the  sum  of  §7,000 
annually  for  his  services  as  a  member  of  said  board. 
Act  Mar.  3.  The  Secretary  of  the  Treasury  and  the  Comptroller  of 
^®^^-  the  Currency  shall  be  ineligible  during  the  time  they  are 

in  office  and  for  two  years  thereafter  to  hold  any  office, 
position,  or  employment  in  any  member  bank.  The  ap- 
pointive members  of  the  Federal  R-eserve  Board  shall  be 
ineligible  during  the  time  they  are  in  office  and  for  two 
years  thereafter  to  hold  any  office,  position,  or  employ- 
ment in  any  member  bank,  except  that  this  restriction 
shall  not  apply  to  a  member  who  has  served  the  full  term 
for  which  he  was  appointed.  Of  the  five  members  thus 
appointed  by  the  President  at  least  two  shall  be  persons 
experienced  in  banking  or  finance.  One  shall  be  desig- 
nated by  the  President  to  serve  for  two,  one  for  four,  one 
for  six,  one  for  eight,  and  one  for  ten  years,  and  there- 
after each  member  so  appointed  shall  serve  for  a  term 
of  ten  years  unless  sooner  removed  for  cause  by  the  Presi- 
dent. 

GOVERNOR  AND  YICE  GOVERNOR;  OFFICERS;   QUALIFI- 
CATION OF  MEMBERS. 

loia*  ?e^*^*  ilf-     ^^^^'  ^^  ^^^  ^^'^  persons  thus  appointed,  one  shall  be 

38     Stat*    L.',  designated  by  the  President  as  governor  and  one  as  vice 

260.  governor  of  the  Federal  Reserve  Board.     The  governor 

of  the  Federal  Reserve  Board,  subject  to  its  supervision, 

shall  be  the  active  executive  officer.     The  Secretary  of 

'  See  section  5209,  Revised  Statutes,  as  aiueiuled  by  act  of  Sept. 
26,  191S  (p.  88  ante),  for  penalty  for  false  certitication  of  checks 
by  officers  of  Federal  reserve  banks  and  national  banks. 


THE  FEDERAL  RESERVE  ACT.  137 

the  Treasury  may  assign  offices  in  the  Department  of  the 
Treasury  for  the  use  of  the  Federal  Reserve  Board.  Each 
member'^of  the  Federal  Reserve  Board  shall  within  fifteen 
days  after  notice  of  appointment  make  and  subscribe  to 
the  oath  of  office. 

PROYISION  FOR  EXPENSES. 

610b.  The  Federal  Reserve  Board  shall  have  power  to    Act  Dec   23. 
levy  semiannually  upon  the  Federal  reserve  banks,  in  pro-  sl^^'sut;"  ^l.'. 
portion  to  their  capital  stock  and  surplus,  an  assessment  26i. 
sufficient  to  pay  its  estimated  expenses  and  the  salaries 
of  its  members  and  employees  for  the  half  year  succeed- 
ing the  levying  of  such  assessment,  together  with  any 
deficit  carried  forward  from  the  preceding  half  year. 

FIRST  MEETING  OF  BOARD.  SECRETARY  OF  TREASURY 
CHAIRMAN  OF  BOARD. 

610c.  The  fii'st  meeting  of  the  Federal  Reserve  Board    Act  Dec.  23, 
shall  be  held  in  Washington,  District  of  Columbia,  as  soon  sl^^'sut.'  ^l.*, 
as  may  be  after  the  passage  of  this  act,  at  a  date  to  be^ei. 
fixed  by  the  Reserve  Bank  Organization  Committee.    The 
Secretary  of  the  Treasury  shall  be  ex  officio  chairman 
of  the  Federal  Reserve  Board. 

MEMBER  OF  FEDERAL  RESERYE  BOARD  NOT  TO  BE 
OFFICER,  DIRECTOR.  OR  STOCKHOLDER  IN  ANY  BANK- 
ING INSTITUTION  OR  TRUST  COMPANY. 

610d.  No  member  of  the  Federal  Reserve  Board  shall    Act  Dec.  23, 
be  an  officer  or  director  of  any  bank,  banking  institution.  38    'stlt!'   u, 
trust  company,  or  Federal  reserve  bank  nor  hold  stock  26I. 
in  any  bank,  banking  institution,  or  trust  company ;  and 
before  entering  upon  his  duties  as  a  member  of  the  Fed- 
eral Reserve  Board  he  shall  certify  under  oath  to  the 
Secretary  of  the  Treasury  that  he  has  complied  with  this 
requirement. 

TACANCIES  ON  BOARD— HOW  FILLED. 

610e.  Whenever  a  vacancy  shall  occur,  other  than  by    Act  Dec.  23, 
expiration  of  term,  among  the  five  members  of  the  Federal  ss    'stat."    l.', 
Reserve  Board  appointed  by  the  President,  as  above  pro-  26i- 
vided,  a  successor  shall  be  appointed  by  the  President, 
with  the  advice  and  consent  of  the  Senate,  to  fill  such 
vacancy,  and  when  appointed  he  shall  hold  office  for  the 
unexpired  term  of  the  member  whose  place  he  is  selected 
to  fill. 

The  President  shall  have  power  to  fill  all  vacancies 
that  may  happen  on  the  Federal  Reserve  Board  during 
the  recess  of  the  Senate,  by  granting  commissions  which 
shall  expire  thirty  days  after  the  next  session  of  the 
Senate  convenes. 

POWERS  OF  SECRETARY  OF  TREASURY. 

610f.  Nothing  in  this  Act  contained  shall  be  construed  ^^^?^^  f^ff-  {^: 
as  taking  away  any  powers  heretofore  vested  by  law  in  38  stat.  l.. 
the  Secretary  of  the  Treasury  which  relate  to  the  super- " 


138  THE  FEDERAL  RESERVE  ACT. 

vision,  management,  and  control  of  the  Treasury  Depart- 
ment and  bureaus  under  such  department,  and  wherever 
any  power  vested  by  this  Act  in  the  Federal  Reserve 
Board  or  the  Federal  reserve  agent  appears  to  conflict 
with  the  powers  of  the  Secretary  of  the  Treasury,  such 
powers  shall  be  exercised  subject  to  the  supervision  and 
control  of  the  Secretary. 

FEDERAL  RESERVE  BOARD  TO  MAKE  ANNUAL  REPORT 
TO  SPEAKER  OF  THE  HOUSE  OF  REPRESENTATIVES. 

1913!  fee.'  K?i     610g.  The  Federal  Reserve  Board  shall  annually  make 
38^  Stat.    L.,  fi  full  report  of  its  operations  to  the  Speaker  of  the  House 
of  Representatives,  who  shall    cause    the    same    to    be 
printed  for  the  information  of  the  Congress. 

COMPTROLLER  OF  THE  CURRENCY. 

19*13!  ?ec^'  H?;'  ^^^^'  Section  three  hundred  and  twenty-four  of  the 
38^  Stat.  L.;  Revised  Statutes  of  the  United  States  shall  be  amended 
so  as  to  read  as  follows:  There  shall  be  in  the  Depart- 
ment of  the  Treasury  a  bureau  charged  with  the  execu- 
tion of  all  laws  passed  by  Congress  relating  to  the  issue 
and  regulation  of  national  currency  secured  by  United 
States  bonds  and,  under  the  general  supervision  of  the 
Federal  Reserve  Board,  of  all  Federal  reserve  notes,  the 
chief  officer  of  which  bureau  shall  be  called  the  Comp- 
troller of  the  Currency  and  shall  perform  his  duties  under 
the  general  directions  of  the  Secretary  of  the  Treasury. 

POWERS   OF    FEDERAL   RESERVE    BOARD. 

1913,  sec."  11;     611.  Scc.  11. — The  Federal  Reserve  Board  shall  be  au- 
261.  ^*^*'    ^"thorized  and  empowered: 

EXAMINATION  OF  BOOKS  OF  FEDERAL  RESERVE  BANKS 
AND  MEMBER  BANKS  BY  FEDERAL  RESERVE  BOARD. 
BOARD  MAY  REQUIRE  REPORTS. 

1913!  sec^"  n^;  611a.  (a)  To  examine  at  its  discretion  the  accounts, 
38  Stat.'  L.;  books  and  affairs  of  each  Federal  reserve  bank  and  of 
each  member  bank  and  to  require  such  statements  and 
reports  as  it  may  deem  necessary.  The  said  board  shall 
publish  once  each  week  a  statement  showing  the  condi- 
tion of  each  Federal  reserve  bank  and  a  consolidated 
statement  for  all  Federal  reserve  banks.  Such  state- 
ments shall  show  in  detail  the  assets  and  liabilities  of  the 
Federal  reserve  banks,  single  and  combined,  and  shall 
furnish  full  information  regarding  the  character  of  the 
money  held  as  reserve  and  the  amount,  nature  and 
maturities  of  the  paper  and  otlier  investments  owned  or 
held  by  Federal  reserve  banks. 


THE   FEDERAL   RESERVE   ACT.  139 

REDISCOUNTS. 

611b.    (b)   To  permit,  or,  on  the  affirmative  vote  of  at  ^^f  ^^^-  23. 
least    five    members    of    the    Reserve    Board    to    re<iuire:«    'stat.'    l.'. 
Federal  reserve  banks  to  rediscount  the  discounted  paper 
of  other  Federal  reserve  banks  at  rates  of  interest  to  be 
fixed  by  the  Federal  Reserve  Board. 

SUSPENSION  OF  RESERYE  REQUIREMENTS. 

611c.  (c)  To  suspend  for  a  period  not  exceeding  thirty  jg^^*  f^^-  ^^: 
da  vs.  and  from  time  to  time  to  renew  such  suspension  for  ss  'stat'  l.', 
periods  not  exceeding  fifteen  days,  any  reserve  require- 
ment specified  in  this  act :  Provided^  That  it  shall  estab- 
lish a  graduated  tax  upon  the  amounts  by  which  the 
reserve  requirements  of  this  Act  may  be  permitted  to  fall 
below  the  level  hereinafter  specified:  And  provided  fur- 
ther, That  when  the  gold  reserve  held  against  Federal 
reserve  notes  falls  below  forty  per  centum,  the  Federal 
Reserve  Board  shall  establish  a«  graduated  tax  of  not 
more  than  one  per  centum  per  annum  upon  such  defi- 
ciency until  the  reserves  fall  to  thirty-two  and  one-half 
per  centum,  and  when  said  reserve  falls  below  thirty-two 
and  one-half  per  centum,  a  tax  at  the  rate  increasingly  of 
not  less  than  one  and  one-half  per  centum  per  annum 
upon  each  two  and  one-half  per  ct-ntum  or  fraction 
thereof  that  such  reserve  falls  below  thirty-two  and  one- 
half  per  centum.  The  tax  shall  be  paid  by  the  reserve 
bank,  but  the  reserve  bank  shall  add  an  amount  equal  to 
said  tax  to  the  rates  of  interest  and  discount  fixed  by  the 
Federal  Reserve  Board. 

ISSUE  AND  RETIREMENT  OF  FEDERAL  RESERYE  NOTES. 

611(i.   {d)  To  supervise  and  regulate  through  the  bureau    ^ct  Dec.  23, 
under  the  charge  of  the  Comptroller  of  the  Currency  the  ss    'stat.'    l.', 
issue  and  retirement  of  Federal  reserve  notes,  and  to  pre-  -'^^* 
scribe  rules  and  regulations  under  which  such  notes  may 
be  delivered  by  the  Comptroller  to  the  Federal  reserve 
agents  applying  therefor. 

RESERYE  CITIES. 

611e.   ie)  To  add  to  the  number  of  cities  cLissified  as  ,„4S*  ^^'^-  ??' 

1   1 1  ">       SOC       1 1  * 

reserve  and  central  reserve  cities  under  existing  law  in  3S     stat.'    l.', 
which  national  banking  associations  are  subject  to  the  "^^' 
reserve  requirements  set  forth  in  section  twenty  of  this 
act;  or  to  reclassify  existing  reserve  and  central  reserve 
cities  or  to  terminate  their  designation  as  such. 

SUSPENSION   OR   REMOYAL   OF   OFFICER    OR    DIRECTOR 
OF  A  FEDERAL  RESERYE  BANK. 

611f.   (/)   To  suspend  or  remove  any  officer  or  director    Act  Dec.  23. 
of  any  Federal  reserve  bank,  the  cause  of  sucli  removal  sl^^'st^at!'  Y.! 
to  be  forthwith  communicated  in  writing  by  the  Federal-*'-* 
Reserve  Board  to  the  removed  officer  or  director  and  to 
said  bank. 


140  THE   FEDERAL  RESERVE  ACT. 

WKITING  OFF  DOUBTFUL  OR  WORTHLESS  ASSETS. 

19^3*  fee'  ii\      ^^^^'   {9)   To  require  the  writing  off  of  doubtful  or 
38    Stat.'    L,',  worthless  assets  upon  the  books  and  balance  sheets  of 
^  ■  Federal  reserve  banks. 

SUSPENSION  OF  OPERATIONS  OF  FEDERAL  RESERVE 
BANK. 

1913!  fee:  ih     61  111.   {h)  To  suspend,  for  the  violation  of  any  of  the 
38    'stat.'    L.)  provisions  of  this  Act,  the  operations  of  any  Federal  re- 
serve bank,  to  take  possession  thereof,  administer  the 
same  during  the  period  of  suspension,  and,  when  deemed 
advisable,  to  liquidate  or  reorganize  such  bank. 

REQUIREMENT  OF  BONDS  FROM  FEDERAL  RESERVE 
AGENTS  AND  AUTHORITY  TO  MAKE  NECESSARY  REGU- 
LATIONS UNDER  THIS  ACT. 

19^3*  sec*^"  '\\'     6^^^-   (*)  To  require 'bonds  of  Federal  reserve  agents, 
38^  Stat.'    L.l  to  make  regulations  for  the  safeguarding  of  all  collateral, 
^"*  bonds.  Federal  reserve  notes,  money  or  property  of  any 

kind  deposited  in  the  hands  of  such  agents,  and  said 
board  shall  perform  the  duties,  functions,  or  services 
specified  in  this  Act,  and  make  all  rules  and  regulations 
necessary  to  enable  said  board  effectively  to  perform  the 
same. 

GENERAL  SUPERVISION. 

19*13*  sec^'  n^i  611J-  (i)  To  exercise  general  supervision  over  said 
38    'stat.'    L.;  Federal  reserve  banks. 

262. 

PERMIT  TO  NATIONAL  BANKS  TO  ACT  AS  TRUSTEE,  EX- 
ECUTOR, ADMINISTRATOR,  OR  REGISTRAR  OF  STOCKS 
AND  BONDS. 

1913*  fee'  i\'  6^^^-  (^)  To  grant  by  special  permit  to  national  banks 
38  'stat.'  L.'  applying  therefor,  w^ien  not  in  contravention  of  State  or 
^^I'ct  Sept.  26,  lofal  law,  the  right  to  act  as  trustee,  executor,  adminis- 
1918.  '  trator,  registrar  of  stocks  and  bonds,  guardian  of  estates, 

assignee,  receiver,  committee  of  estates  of  lunatics,  or  in 
any  other  fiduciary  capacity  in  which  State  banks,  trust 
companies,  or  other  corporations  which  come  into  com- 
petition with  national  banks  are  permitted  to  act  under 
the  laws  of  the  State  in  which  the  national  bank  is 
located. 

Whenever  the  laws  of  such  State  authorize  or  permit 
the  exercise  of  any  or  all  of  the  foregoing  powers  by 
State  banks,  trust  companies,  or  other  corporations  which 
compete  with  national  banks,  the  granting  to  and  the 
exercise  of  such  powers  by  national  banks  shall  not  be 
deemed  to  ba  in  contravention  of  State  or  local  law 
within  the  meaning  of  this  Act. 

National  banks  exercising  any  or  all  of  the  powers 
enumerated  in  this  subsection  shall  segregate  all  assets 


THE  FEDERAL.  RESERVE  ACT.  141 

held  in  any  fiduciary  capacity  from  the  general  assets  of 
the  bank  and  shall  keep  a  separate  set  of  books  and  rec- 
ords showing  in  proper  detail  all  transactions  engaged 
in  under  authority  of  this  subsection.  Such  books  and 
records  shall  be  open  to  inspection  by  the  State  authori- 
ties to  the  same  extent  as  the  books  and  records  of  cor- 
porations organized  under  State  law  which  exercise  fidu- 
ciary powers,  but  nothing  in  this  Act  shall  be  construed 
as  authorizing  the  State  authorities  to  examine  the  books, 
records,  and  assets  of  the  national  bank  which  are  not 
held  in  trust  under  authority  of  this  subsection. 

No  national  bank  shall  receive  in  its  trust  department 
deposits  of  current  funds  subject  to  check  or  the  deposit 
of  checks,  drafts,  bills  of  exchange,  or  other  items  for 
collection  or  exchange  purposes.  Funds  deposited  or 
held  in  trust  by  the  bank  awaiting  investment  shall  be 
carried  in  a  separate  account  and  shall  not  be  used  by  the 
bank  in  the  conduct  of  its  business  unless  it  shall  first  set 
aside  in  the  trust  department  United  States  bonds  or 
other  securities  approved  by  the  Federal  Reserve  Board. 

In  the  event  of  the  failure  of  such  bank  the  owners  of 
the  funds  held  in  trust  for  investment  shaH  have  a  lien 
on  the  bonds  or  other  securities  so  set  apart  in  addition 
to  their  claim  against  the  estate  of  the  bank. 

"Whenever  the  laws  of  a  State  require  corporations  act- 
ing in  a  fiduciary  capacity,  to  deposit  securities  with  the 
State  authorities  for  the  protection  of  private  or  court 
trusts,  national  banks  so  acting  shall  be  required  to  make 
similar  deposits  and  securities  so  deposited  shall  be  held 
for  the  protection  of  private  or  court  trusts,  as  provided 
by  the  State  law. 

National  banks  in  such  cases  shall  not  be  required  to 
execute  the  bond  usually  required  of  individuals  if  State 
corporations  under  similar  circumstances  are  exempt 
from  this   requirement. 

National  banks  shall  have  power  to  execute  such  bond 
when  so  required  by  the  laws  of  the  State. 

In  any  case  in  which  the  laws  of  a  State  require  that  a 
corporation  acting  as  trustee,  executor,  administrator,  or 
in  any  capacity  specified  in  this  section,  shall  take  an 
oath  or  make  an  affidavit,  the  president,  vice  president, 
cashier,  or  trust  officer  of  such  national  bank  may  take 
the  necessary  oath  or  execute  the  necessary  affidavit. 

It  shall  be  unlawful  for  any  national  banking  associa- 
tion to  lend  any  officer,  director,  or  employee  any  funds 
held  in  trust  under  the  powers  conferred  by  this  section. 
Any  officer,  director,  or  employee  making  such  loan,  or  to 
whom  such  loan  is  made,  may  be  fined  not  more  than 
$5,000,  or  imprisoned  not  more  than  five  j^ears.  or  may 
be  both  fined  and  imprisoned,  in  the  discretion  of  the 
court. 

In  passing  upon  applications  for  permission  to  exercise 
the  powers  enumerated  in  this  subsection,  the  Federal 


142  THE  FEDERAL  RESERVE  ACT. 

Reserve  Board  may  take  into  consideration  the  amount 
of  capital  and  surplus  of  the  applying  bank,  whether  or 
not  such  capital  and  surplus  is  sufficient  under  the  cir- 
cumstances of  the  case,  the  needs  of  the  community  to  be 
served,  and  any  other  facts  and  circumstances  that  seem 
to  it  proper,  and  may  grant  or  refuse  the  application 
accordingly :  Provided^  That  no  permit  shall  be  issued  to 
any  national  banking  association  having  a  capital  and 
surplus  less  than  the  capital  and  surplus  required  by 
State  law  of  State  banks,  trust  companies,  and  corpora- 
tions exercising  such  powers. 

EMPLOYMENT  OF  ATTORNEYS,  CLERKS,  ETC.,  AND  PRO- 
VISION FOR  PAYMENT  OF  SALARIES. 

Act  Dec.  23,  611-1.  (Z)  To  employ  such  attorneys,  experts,  assistants, 
38  'sut  L.i  clerks,  or  other  employees  as  may  be  deemed  necessary  to 
2^2.  conduct  the  business  of  the  board.    All  salaries  and  fees 

shall  be  fixed  in  advance  by  said  board  and  shall  be  paid 
in  the  same  manner  as  the  salaries  of  the  members  of  said 
board.  All  such  attorneys,  experts,  assistants,  clerks, 
and  other  employees  shall  be  appointed  without  regard  to 
the  provision^  of  the  act  of  January  sixteenth,  eighteen 
hundred  and  eighty-three  (volume  twenty -two.  United 
States  Statutes  at  Large,  page  four  hundred  and  three), 
and  amendments  thereto,  or  any  rule  or  regulation  made 
in  pursuance  thereof:  Provided^  That  nothing  herein 
shall  prevent  the  President  from  placing  said  employees 
in  the  classified  service. 

DISCOUNT  BY  FEDERAL  RESERVE  BANK  OF  PAPER  SE- 
CURED BY  UNITED  STATES  BONDS  ISSUED  SINCE 
APRIL  24,  1917. 

i9iV*  ^^^^'  ^'  Slim,  (m)  Upon  the  affirmative  vote  of  not  less  than 
five  of  its  members,  the  Federal  Reserve  Board  shall  have 
power  to  permit  Federal  reserve  banks  to  discount  for  any 
member  bank  notes,  drafts,  or  bills,  of  exchange  bearing 
the  signature  or  endorsement  of  any  one  borrower  in  excess 
of  the  amount  permitted  by  section  nine  and  section  thir- 
teen of  this  act,  but  in  no  case  to  exceed  twenty  per 
centum  of  the  member  bank's  capital  and  surplus :  Pro- 
vided^ however,  That  all  such  notes,  drafts,  or  bills  of 
exchange  discounted  for  any  member  bank  in  excess  of 
the  amount  permitted  under  such  sections  shall  be  se- 
cured by  not  less  than  a  like  face  amount  of  bonds  or 
notes  of  the  United  States  issued  since  April  twenty- 
fourth,  nineteen  hundred  and  seventeen,  or  certificates  of 
indebtedness  of  the  United  States:  Provided  further, 
That  the  provisions  of  this  subsection  {m)  shall  not  be 
operative  after  December  thirty-first,  nineteen  hundred 
and  twenty. 


THE   FEDERAL  RESERVE  ACT.  143 

FEDERAL  ADTISORT  COUNCIL. 

612.  Sec.  12.— There  is  hereby  created  a  Federal  Ad-  jg^^*  P/^^-  ^^: 
visory  Council,  which  shall  consist  of  as  many  members  38  sut."  l.) 
as  there  are  Federal  reserve  districts.    Each  Federal  re- "    * 

serve  bank  by  its  board  of  directors  shall  annually  select 
from  its  own  Federal  reserve  district  one  member  of  said 
council,  who  shall  receive  such  compensation  and  allow- 
ances as  may  be  fixed  by  his  board  of  directors  subject  to 
the  approval  of  the  Federal  Eeserve  Board.  The  meet- 
ings of  said  advisory  council  shall  be  held  at  Washing- 
ton, District  of  Columbia,  at  least  four  times  each  year, 
and  oftener  if  called  by  the  Federal  Reserve  Board.  The 
council  may  in  addition  to  the  meetings  above  provided 
for  hold  such  other  meetings  in  Washington,  District  of 
Columbia,  or  elsewhere,  as  it  may  deem  necessary,  may 
select  its  own  officers  and  adopt  its  own  methods  of  pro- 
cedure, and  a  majority  of  its  members  shall  constitute  a 
quorum  for  the  transaction  of  business.  Vacancies  in  the 
council  shall  be  filled  by  the  respective  reserve  banks,  and 
members  selected  to  fill  vacancies,  shall  serve  for  the  un- 
expired term. 

POWERS  OF  FEDERAL  ADVISORY  COUNCIL. 

612a.  The  Federal  Advisory  Council  shall  have  power,  ^^Act  Dec  23, 
by  itself  or  through  its  officers,  (1)  to  confer  directly  with  ss     stat.    L', 
the  Federal  Eeserve  Board  on  general  business  condi-  ~^^' 
tions;  (2)  to  make  oral  or  written  representations  con- 
cerning matters  within  the  jurisdiction  of  said  board; 
(3)  to  call  for  information  and  to  make  recommendations 
in  regard  to  discount  rates,  rediscount  business,  note  is- 
sues, reserve  conditions  in  the  various  districts,  the  pur- 
chase and  sale  of  gold  or  securities  by  reserve  banks, 
open-market  operations  by  said  banks,  and  the  general 
affairs  of  the  reserve  banking  system. 

POWERS  OF  FEDERAL  RESERTE  BANKS. 

613.  Sec.  13. — Any  Federal  reserve  bank  may  receive  jg^ct  Dec  23, 
from  any  of  its  member  banks,  and  from  the  United  ss  stat."  l.', 
States.^  deposits  of  current  funds  in  lawful  money, '^Act  sept.  7. 
national-bank  notes,  Federal  reserve  notes,  or  checks,  L^^fgg^^  ^**^* 
and  drafts,  payable  upon  presentation,  and  also,  for  Act  June  21, 
collection,  maturing  notes  and  bills;  or,  solely  for  pur- ^^^'' ^^*^- *• 
poses  of  exchange  or  of  collection,  may  receive  from 

other  Federal  reserve  banks  deposits  of  current  funds  in 
lawful  money,  national-bank  notes,  or  checks  upon 
other  Federal  reserve  banks,  and  checks  and  draft.s.  pay- 
able upon  presentation  within  its  district,  and  maturing 
notes  and  bills  payable  within  its  district;  or,  solely  for 

*  Under  authority  of  war  finance  act,  approved  Apr.  5,  1918, 
as  amended  by  act  of  Mar.  3,  1919,  may  receive  deposits  from  War 
Finance   Corporation. 


144  THE  FEDERAL  RESERVE  ACT. 

the  purposes  of  exchange  or  of  collection,  may  receive 
from  any  nomnember  bank  or  trust  company  deposits 
of  current  funds  in  lawful  money,  national-bank  notes, 
Federal  reserve  notes,  checks  and  drafts  payable  upon 
presentation,  or  maturing  notes  and  bills:  Provided^ 
Such  nonmember  bank  or  trust  company  maintains  with 
the  Federal  reserve  bank  of  its  district  a  balance  sufficient 
to  offset  the  items  in  transit  held  for  its  account  by  the 
Federal  reserve  bank:  Provided^  further^  That  nothing 
in  this  or  any  other  section  of  this  act  shall  be  construed 
as  prohibiting  a  member  or  nonmember  bank  from  mak- 
ing reasonable  charges,  to  be  determined  and  regulated 
by  the  Federal  Reserve  Board,  but  in  no  case  to  exceed 
10  cents  per  $100  or  fraction  thereof,  based  on  the  total 
of  checks  and  drafts  presented  at  any  one  time,  for  col- 
lection or  payment  of  checks  and  drafts  and  remission 
therefor  by  exchange  or  otherwise;  but  no  such  charges 
shall  be  made  against  the  Federal  reserve  banks. 

REDISCOUNTS  — NOTES,    DRAFTS,    AND    BILLS    OF    EX- 
CHANGE. 

1913*  ^c^*  1^3^:  613a.  Upon  the  indorsement  of  any  of  its  member 
263  ^^^^  ^■'  '^^"ks?  which  shall  be  deemed  a  waiver  of  demand,  notice 
Act  Sept.  7,  and  protest  by  such  bank  as  to  its  own  indorsement  ex- 
U,^7^2f^  ^*^*' clusively,  any  Federal  reserve  bank  may  discount  notes, 
drafts,  and  bills  of  exchange  arising  out  of  actual  com- 
mercial transactions;  that  is,  notes,  drafts,  and  bills  of 
exchange  issued  or  drawn  for  agricultural,  industrial,  or 
commercial  purposes,  or  the  proceeds  of  which  have  been 
used,  or  are  to  be  used,  for  such  purposes,  the  Federal 
Reserve  Board  to  have  the  right  to  determine  or  define 
the  character  of  the  paper  thus  eligible  for  discount, 
within  the  meaning  of  this  Act.  Nothing  in  this  Act 
contained  shall  be  construed  to  prohibit  such  notes, 
drafts,  and  bills  of  exchange,  secured  by  staple  agricul- 
tural products,  or  other  goods,  wares,  or  merchandise 
from  bein^  eligible  for  such  discount ;  but  such  definition 
shall  not  include  notes,  drafts,  or  bills  covering  merely 
investments  or  issued  or  drawn  for  the  purpose  of  carry- 
ing or  trading  in  stocks,  bonds,  or  other  investment 
securities,  except  bonds  and  notes  of  the  Government  of 
the  United  States.^  Notes,  drafts,  and  bills  admitted  to 
discount  under  the  terms  of  this  paragraph  must  have  a 
maturity  at  the  time  of  discount  of  not  more  than  ninety 
days,  exclusive  of  days  of  grace:  Provided^  That  notes, 
drafts,  and  bills  drawn  or  issued  for  agricultural  pur- 
poses or  based  on  live  stock  and  having  a  maturity  not 
exceeding  six  months,  exclusive  of  days  of  grace,  may  be 
discounted  in  an  amount  to  be  limited  to  a  percentage 
of  the  assets  of  the  Federal  reserve  bank,  to  be  ascer- 
tained and  fixed  by  the  Federal  Reserve  Board. 

'  Or  bonds  of  the  War  Finance  Corporation.    See  act  approved 
Apr.  5,  1918. 


THE   FEDERAL,   RESERVE   ACT.  145 

The  aggregate  of  siich  notes,  drafts,  and  bills  bearing 
the  signature  or  indorsement  of  any  one  borrower,  whether 
a  person,  company,  firm,  or  corporation,  rediscounted  for 
any  one  bank  shall  at  no  time  exceed  ten  per  centum  of 
the  unimpaired  capital  and  surplus  of  said  bank ;  but  this 
restriction  shall  not  apply  to  the  discount  of  bills  of  ex- 
change drawn  in  good  faith  against  actually  existing 
values. 

ACCEPTANCES  AND  LIMITATIONS  THEREOF. 

613b.  Any  Federal  reserve  bank  may  discount  accept-  Act  Dec.  23, 
ances  of  the  kinds  hereinafter  described,  which  have  ail^^'stat  "^l.! 
maturity  at  the  time  of  discount  of  not  more  than  three  '^^t  Mar  3 
months'  sight,  exclusive  of  days  of  grace,  and  which  areisioj  38  stat! 
indorsed  by  at  least  one  member  bank.  act  Sept.  7, 

Any  member  bank  may  accept  drafts  or  bills  of  ex-  ^^^7^2^^  ^*^*' 
change  drawn  upon  it  having  not  more  than  six  months  Act  .iune  21, 
sight  to  run.  exclusive  of  days  of  gi'ace,  which  grow  out  ^  ^  '  ^^^'  ^' 
of  transactions  involving  the  importation  or  exporta- 
tion of  goods ;  or  which  gi*ow  out  of  transactions  involv- 
ing the  domestic  shipment  of  goods  provided  shipping 
documents  conveying  or  securing  title  are  attached  at 
the  time  of  acceptance;  or  which  are  secured  at  the  time 
of  acceptance  by  a  warehouse  receipt  or  other  such 
document  conveying  or  securing  title  covering  readily 
marketable  staples.  Xo  member  bank  shall  accept, 
whether  in  a  foreign  or  domestic  transaction,  for  any 
one  person,  company,  firm,  or  corporation  to  an  amount 
equal  at  any  time  in  the  aggregate  to  more  than  ten  per 
centiun  of  its  paid-up  and  unimpaired  capital  stock  and 
surplus,  unless  the  bank  is  secured  either  by  attached 
documents  or  by  some  other  actual  security  growing  out 
of  the  same  transaction  as  the  acceptance;  and  no  bank 
shall  accept  such  bills  to  an  amount  equal  at  any  time 
in  the  aggregate  to  more  than  one-half  of  its  paid-up 
and  unimpaired  capital  stock  and  surplus:  Provided, 
however.  That  the  Federal  Reserve  Board,  under  such 
general  regulations  as  it  may  prescribe,  which  shall 
apply  to  all  banks  alike  regardless  of  the  amount  of 
capital  stock  and  surplus,  may  authorize  any  member 
bank  to  accept  such  bills  to  an  amount  not  exceeding  at 
any  time  in  the  aggregate  one  hundred  per  centum  of 
its  paid-up  and  unimpaired  capital  stock  and  surplus: 
Provided  further.  That  the  aggregate  of  acceptances 
gi-owing  out  of  domestic  transactions  shall  in  no  event 
exceed  fifty  per  centum  of  such  capital  stock  and  surplus. 

Any  Federal  reserve  bank  may  make  advances  to  its 
member  banks  on  their  promissory  notes  foi;  a  period  not 
exceeding  fifteen  days  at  rates  to  be  established  by  such 
Federal  reserve  banks,  subject  to  the  review  and  determi- 
nation of  the  Federal  Reserve  Board,  provided  such 
promissory  notes  are  secured  by  such  notes,  drafts,  bills 
of  exchange,  or  bankers'  acceptances  as  are  eligible  for 
4&4312°— 20 10 


146  THE  FEDERAL  RESERYE  ACT. 

rediscount  or  for  purchase  by  Federal  reserve  banks 
under  the  provisions  of  this  Act,  or  by  the  deposit  or 
pledge  of  bonds  or  notes  of  the  United  States.^ 

EXCEPTIONS  AS  TO  LIMIT  OF  INDEBTEDNESS.  POWER 
TO  ACT  AS  INSURANCE  AGENT,  AS  REAL  ESTATE  LOAN 
BROKER,  AND  TO  ACCEPT  DRAFTS,  ETC. 

Act  Dec.  23,  613c.  Section  fifty-two  hundred  and  two  of  the  Revised 
38  'stiu  L.l  Statutes  of  the  United  States  is  hereby  amended  so  as  to 
264.  read  as  follows:  No  national  banking  association  shall  at 

any  time  be  indebted,  or  in  any  way  liable,  to  an  amount 
exceeding  the  amount  of  its  capital  stock  at  such  time 
actually  paid  in  and  remaining  undiminished  by  losses  or 
otherwise,  except  on  account  of  demands  of  the  nature 
following : 

First.  Notes  of  circulation. 

Second.  Moneys  deposited  with  or  collected  by  the 
association. 

Third.  Bills  of  exchange  or  drafts  drawn  against 
money  actually  on  deposit  to  the  credit  of  the  association, 
or  due  thereto. 

Fourth.  Liabilities  to  the  stockholders  of  the  associa- 
tion for  dividends  and  reserve  profits. 

Fifth.  Liabilities  incurred  under  the  provisions  of  the 
Federal  reserve  Act.^ 
1916*  fo^stat!     The  discount  and  rediscount  and  the  purchase  and  sale 
L.,  753.  by  any  Federal  reserve  bank  of  any  bills  receivable  and 

of  domestic  and  foreign  bills  of  exchange,  and  of  accept- 
ances authorized  by  this  Act,  shall  be  subject  to  such 
restrictions,  limitations,  and  regulations  as  may  be  im- 
posed by  the  Federal  Reserve  Board. 

That  in  addition  to  the  powers  now  vested  by  law  in 
national  banking  associations  organized  under  the  laws 
of  the  United  States  any  such  association  located  and  do- 
ing business  in  any  place  the  population  of  which  does 
not  exceed  five  thousand  inhabitants,  as  shown  by  the  last 
preceding  decennial  census,  may,  under  such  rules  and 
regulations  as  may  be  prescribed  by  the  Comptroller  of 
the  Currency,  act  as  the  agent  for  any  fire,  life,  or  other 
insurance  company  authorized  by  the  authorities  of  the 
State  in  which  said  bank  is  located  to  do  business  in  said 
State,  by  soliciting  and  selling  insurance  and  collecting 
premiums  on  policies  issued  by  such  company;  and  may 
receive  for  services  so  rendered  such  fees  or  commissions 
as  may  be  agreed  upon  between  the  said  association  and 
the  insurance  company  for  which  it  may  act  as  agent; 
and  may  also  act  as  the  broker  or  agent  for  others  in 
making  or  pi;ocuring  loans  on  real  estate  located  within 

*  Or  by  bonds  and  notes  of  War  Finance  Corporation.  See  sec- 
tion 13,  War  Finance  Corporation  Act,  approved  Apr.  5,  1918. 

'  Also  liabilities  incurred  under  the  provisions  of  the  War 
Finance  Corporation  Act.  See  section  20,  War  Finance  Corpora- 
tion Act,  approved  Apr.  5,  1918. 


THE  FEDERAL,  RESERVE  ACT.  147 

one  hundred  miles  of  the  place  in  which  said  bank  may 
be  located,  receiving  for  such  services  a  reasonable  fee 
or  commission:  Provided,  however.  That  no  such  bank 
shall  in  any  case  guarantee  either  the  principal  or  inter- 
est of  any  such  loans  or  assume  or  guarantee  the  payment 
of  any  premium  on  insurance  policies  issued  through  its 
agency  by  its  principal:  And  provided  further,  That 
the  bank  shall  not  guarantee  the  truth  of  any  statement 
made  by  an  assured  in  filing  his  application  for  insur- 
ance. 

Any  member  bank  may  accept  drafts  or  bills  of  ex- 
change drawn  upon  it  having  not  more  than  three  months' 
sight  to  run,  exclusive  of  days  of  grace,  drawn  under 
regulations  to  be  prescribed  by  the  Federal  Reserve  Board 
by  banks  or  bankers  in  foreign  countries  or  dependencies 
or  insular  possessions  of  the  United  States  for  the  pur- 
pose of  furnishing  dollar  exchange  as  required  by  the 
usages  of  trade  in  the  respective  countries,  dependencies, 
or  insular  possessions.  Such  drafts  or  bills  may  be  ac- 
quired by  Federal  reserve  banks  in  such  amounts  and 
subject  to  such  regidations,  restrictions,  and  limitations 
as  may  be  prescribed  by  the  Federal  Reserve  Board : 
Provided,  however.  That  no  member  bank  shall  accept 
such  drafts  or  bills  of  exchange  referred  to  this  para- 
graph for  any  one  bank  to  an  amount  exceeding  in  the 
aggregate  ten  per  centum  of  the  paid-up  and  unimpaired 
capital  and  surplus  of  the  accepting  bank  unless  the 
draft  or  bill  of  exchange  is  accompanied  by  documents 
conveying  or  securing  title  or  by  some  other  adequate 
security:  Provided  further.  That  no  member  bank  shall 
accept  such  drafts  or  bills  in  an  amount  exceeding  at  any 
time  the  aggregate  of  one-half  of  its  paid-up  and  unim- 
paired capital  and  surplus. 

OPEN  MARKET  OPERATIONS. 

614.  Sec.  14. — Any  Federal  reserve  bank  may,  imder    Act  Dec.  23, 
ndes  and  regulations  prescribed  by  the  Federal  Reserve  ^^^g^^-gt^at^-  ^l! 
Board,  purchase  and  sell  in  the  open  market,  at  home  or  264. 
abroad,  either  from  or  to  domestic  or  foreign  iDanks,  firms,  lote*  39^'stat! 
corporations,  or  individuals,  cable  transfers  and  bankers'  ^•'  '^^^• 
acceptances  and  bills  of  exchange  of  the  kinds  and  ma- 
turities by  this  Act  made  eligible  for  rediscount,  with  or 
without  the  indorsement  of  a  member  bank. 
Every  Federal  reserve  bank  shall  have  power: 
{a)   To  deal  in  gold  coin  and  bullion  at  home  or  abroad, 
to  make  loans  thereon,  exchange  Federal  reserve  notes 
for  gold,  gold  coin,  or  gold  certificates,  and  to  contract  for 
loans  of  gold  coin  or  bullion,  giving  therefor,  when  neces- 
sary, acceptable  security,  including  the  hypothecation  of 
United  States  bonds  or  other  securities  which  Federal 
reserve  banks  are  authorized  to  hold: 


148  THE  FEDERAL  RESERVE  ACT. 

(b)  To  buy  and  sell,  at  home  or  abroad,  bonds  and  notes 
of  the  United  States,  and  bills,  notes,  revenue  bonds,  and 
warrants  with  a  maturity  from  date  of  purchase  of  not 
exceeding  six  months,  issued  in  anticipation  of  the  col- 
lection of  taxes  or  in  anticipation  of  the  receipt  of  assured 
revenues  by  any  State,  county,  district,  political  subdivi- 
sion, or  municipality  in  the  continental  United  States,  in- 
cluding irrigation,  drainage  and  reclamation  districts, 
such  purchases  to  be  made  in  accordance  with  rules  and 
regulations  prescribed  by  the  Federal  Reserve  Board ; 

(c)  To  purchase  from  member  banks  and  to  sell,  with 
or  without  its  indorsement,  bills  of  exchange  arising  out 
of  commercial  transactions,  as  hereinbefore  defined ; 

(d)  To  establish  from  time  to  time,  subject  to  review, 
and  determination  of  the  Federal  Eeserve  Board,  rates 
of  discount  to  be  charged  by  the  Federal  reserve  bank  for 
each  class  of  paper,  which  shall  be  fixed  with  a  view  of 
accommodating  commerce  and  business; 

Act  June  21,  («)  To  establish  accounts  with  other  Federal  reserve 
)9i7,  sec.  6.  banks  for  exchange  purposes  and,  with  the  consent  or 
upon  the  order  and  direction  of  the  Federal  Reserve 
Board  and  under  regulations  to  be  prescribed  by  said 
board,  to  open  and  maintain  accounts  in  foreign  coun- 
tries, appoint  correspondents,  and  establish  agencies  in 
such  countries  wheresoever  it  may  be  deemed  best  for 
the  purpose  of  purchasing,  selling,  and  collecting  bills  of 
exchange,  and  to  buy  and  sell,  with  or  without  its  indorse- 
ment, through  such  correspondents  or  agencies,  bills  of 
exchange  (or  acceptances)  arising  out  of  actual  commer- 
cial transactions  which  have  not  more  than  ninety  days 
to  run,  exclusive  of  days  of  grace,  and  which  bear  the 
signature  of  two  or  more  responsible  parties,  and,  with 
the  consent  of  the  Federal  Reserve  Board,  to  open  and 
maintain  banking  accounts  for  such  foreign  correspond- 
ents or  agencies.  Whenever  any  such  account  has  been 
opened  or  agency  or  correspondent  has  been  appointed 
by  a  Federal  reserve  bank,  with  the  consent  of  or  under 
the  order  and  direction  of  the  Federal  Reserve  Board, 
any  other  Federal  reserve  bank  may,  with  the  consent 
and  approval  of  the  Federal  Reserve  Board,  be  permitted 
to  carry  on  or  conduct,  through  the  Federal  reserve  bank 
07  ning  such  account  or  appointing  such  agency  or 
correspondent,  any  transaction  authorized  by  this  sec- 
tion under  rules  and  regulations  to  be  prescribed  by  the 
board 

GOVERNMENT  DEPOSITS. 


19^3*  ?ec'  li-     ^^^'  ^^^*  ^^' — '^^^  moneys  held  in  the  general  fund  of 
38^'  'staV    L.',  the  Treasury,  except  the  five  per  centum  fund  for  the  re- 
demption of  outstanding  national-bank  notes  and   the 
funds  provided  in  this  act  for  the  redemption  of  Federal 
reserve  notes  may,  upon  the  direction  of  the  Secretary  of 


265. 


THE  FEDERAL  RESER^^   ACT.  149 

the  Treasury,  be  deposited  in  Federal  reserve  banks, 
which  banks,  when  required  by  the  Secretary  of  the 
Treasury,  shall  act  as  fiscal  agents  of  the  United  States;  ^ 
and  the  revenues  of  the  Government  or  any  part  thereof 
may  be  deposited  in  such  banks,  and  disbursements  may 
be  made  by  checks  drawn  against  such  deposits. 

No  public  funds  of  the  Philippine  Islands,  or. of  the 
postal  savings,  or  any  Government  funds,  shall  be  de- 
posited in  the  continental  United  States  in  any  bank  not 
belonging  to  the  system  established  by  this  act :  ^  Pro- 
vided^ however^  That  nothing  in  this  act  shall  be  con- 
strued to  deny  the  right  of  the  Secretary  of  the  Treasury 
to  use  member  banks  as  depositories. 

NOTE  ISSUES. 

FEDERAL  EESERTE  NOTES  AUTHORIZED. 

616.  Sec.  16. — Federal  reserve  notes,  to  be  issued  at  the  jg^^g^  ^^^^  ^l\ 
discretion  of  the  Federal  Reserve  Board  for  the  purpose  38    'stat.     l.| 
of  making  advances  to  Federal  reserve  banks  through  the  ~ 
Federal  reserve  agents  as  hereinafter  set  forth  and  for  no 
other  purpose,  are  hereby  authorized.     The  said  notes 
shall  be  obligations  of  the  United  States  and  shall  be  re- 
ceivable by  all  national  and  member  banks  and  Federal 
reserve  banks  and  for  all  taxes,  customs,  and  other  public 
dues.     They  shall  be  redeemed  in  gold  on  demand  at  the 
Treasury  Department  of  the  United  States,  in  the  city  of 
Washington,  District  of  Columbia,  or  in  gold  or  lawful 
money  at  any  Federal  reserve  bank. 

CXDLX,ATERAL  SECURITY. 

APPLICATIONS  FOR  FEDERAL  RESERYE  NOTES. 

616a.  Any  Federal  reserve  bank  may  make  application  ^^^  ^^<^-  ,23- 

1      -i         IT-.    11  ,/•!  .cji      lyio,    sec.    lb; 

to  the  local  Federal  reserve  agent  lor  such  amount  ot  the  38     stat.     l.. 
Federal  reserve  notes  hereinbefore  provided  for  as  it  may  "^  Act  Sept.  7, 
require.     Such  application  shall  be  accompanied  with  a  L^^^if  ^  ^*^*- 
tender  to  the  local  Federal  reserve  agent  of  collateral  in     Act"  June  21. 
amount  equal  to  the  sum  of  the  Federal  reserve  notes  ^  ^^'  ®'^*^'  ^' 
thus  applied  for  and  issued  pursuant  to  such  application. 
The  collateral  security  thus  offered  shall  be  notes,  drafts, 
bills  of  exchange,  or  acceptances  acquired  under  the  pro- 
visions of  section  thirteen  of  this  act,  or  bills  of  exchange 
indorsed  by  a  member  bank  of  any  Federal  reserve  dis- 

*  Under  War  Finance  Corporation  act  approved  Apr.  5,  191S,  as 
amended  by  act  of  Mar.  3,  1919,  Federal  reserve  banl^s  may  also 
act  as  fiscal  agents  of  the  War  Finance  Corporation. 

*  Under  section  7  of  the  act  approved  Apr.  24,  1917,  section  S  of 
the  act  approved  Sept.  24,  1917,  and  section  8  of  the  act  approved 
Apr.  4,  1918,  the  proceeds  of  sale  of  Liberty  bonds  of  the  first, 
second,  and  third  issues  may  be  deposited  in  nonmember  banks. 
The  act  of  May  18,  1916,  amending  the  postal  saviujxs  act,  author- 
izes the  deposit  of  postal  savings  funds  in  nonmember  banks. 


150  THE  FEDERAL,  EESERVE  ACT. 

trict  and  purchased  under  the  provisions  of  section  four- 
teen of  this  act,  or  bankers'  acceptances  purchased  under 
the  provisions  of  said  section  fourteen,  or  gold  or  gold 
certificates ;  but  in  no  event  shall  such  collateral  security, 
■whether  gold,  gold  certificates,  or  eligible  paper,  be  less 
than  the  amount  of  Federal  reserve  notes  applied  for.^ 
The  Federal  reserve  agent  shall  each  clay  notify  the  Fed- 
eral Reserve  Board  of  all  issues  and  withdrawals  of  Fed- 
eral reserve  notes  to  and  by  the  Federal  reserve  bank  to 
which  he  is  accredited.  The  said  Federal  Reserve  Board 
may  at  any  time  call  upon  a  Federal  reserve  bank  for 
additional  security  to  protect  the  Federal  reserve  notes 
issued  to  it. 

RESERVE  REQUIREMENTS  FOR  FEDERAL  RESERVE 
BANKS. 

1913*  ^ec'  li'     ®1^^-  Every  Federal  reserve  bank  shall  maintain  re- 
38    Stat.'    L.)  serves  in  gold  or  lawful  money  of  not  less  than  thirty- 
'^Aet  June  21,  fi'^'s  per  ceutum  against  its  deposits  and  reserves  in  gold 
1917.  sec.  7.     of  uot  less  than  forty  per  centum  against  its  Federal  re- 
serve notes   in   actual   circulation:   Provided,   hoivever, 
That  when  the  Federal  reserve  agent  holds  gold  or  gold 
certificates  as  collateral  for  Federal  reserve  notes  issued 
to  the  bank  such  gold  or  gold  certificates  shall  be  counted 
as  part  of  the  gold  reserve  which  such  bank  is  required 
to  maintain  against  its  Federal  reserve  notes  in  actual 
circulation. 

ISSIE  AND  REDEMPTION  OF  FEDERAL  RESERVE  NOTES. 
NO  FEDERAL  RESERVE  BANK  PERMITTED  TO  PAY  OUT 
NOTES  ISSUED  THROUGH  ANOTHER  FEDERAL  RESERVE 
BANK. 

Act  Dec.  23,  616c.  Notes  SO  paid  out  shall  bear  upon  their  faces  a 
si^^'st^a^*!*  ^L.;  distinctive  letter  and  serial  number  which  shall  be  as- 
~^tct  June  21  signed  by  the  Federal  Reserve  Board  to  each  Federal 
1917,  sec.  7.  '  reserve  bank.  "Whenever  Federal  reserve  notes  issued 
through  one  Federal  reserve  bank  shall  be  received  by 
another  Federal  reserve  bank,  they  shall  be  promptly  re- 
turned for  credit  or  redemption  to  the  Federal  reserve 
bank  through  which  they  were  originally  issued  or,  upon 
direction  of  such  Federal  reserve  bank,  they  shall  be  for- 
warded direct  to  the  Treasurer  of  the  United  States  to  be 
retired.  No  Federal  reserve  bank  shall  pay  out  notes 
issued  through  another  under  penalty  of  a  tax  of  ten  per 
centum  upon  the  face  value  of  notes  so  paid  out.  Notes 
presented  for  redemption  at  the  Treasury  of  the  United 
States  shall  be  paid  out  of  the  redemption  fund  and  re- 
turned to  tlic  Federal  reserve  banks  through  which  they 
were  originally  issued,  and  thereupon  such  Federal  re- 

*  Under  section  13  of  War  Finance  Corporation  act  approved 
Apr.  5,  1918,  notes  secured  by  War  Finance  Corporation  bonds 
may  be  used  to  same  extent  as  collateral,  as  notes  secured  by 
United  States  bonds. 


THE  FEDERAL  RESERVE  ACT.  151 

serve  bank  shall,  upon  demand  of  the  Secretary  of  the 
Treasury,  reimburse  such  redemi^tion  fund  in  lawful 
money  or,  if  such  Federal  reserve  notes  have  been  re- 
deemed by  the  Treasurer  in  gold  or  gold  certificates,  then 
such  funds  shall  be  reimbursed  to  the  extent  deemed 
necessary  by  the  Secretary  of  the  Treasury  in  gold  or 
gold  certificates,  and  such  Federal  reserve  bank  shall,  so 
long  as  any  of  its  Federal  reserve  notes  remain  outstand- 
ing, maintain  with  the  Treasurer  in  gold  an  amount  suffi- 
cient in  the  judgment  of  the  Secretary  to  provide  for  all 
redemptions  to  be  made  by  the  Treasurer.  Federal  re- 
serve notes  received  by  the  Treasurer  otherwise  than 
for  redemption  may  be  exchanged  for  gold  out  of  the  re- 
demption fund  hereinafter  provided  and  returned  to  the 
reserve  bank  through  which  they  were  originally  issued, 
or  they  may  be  returned  to  such  bank  for  the  credit  of 
the  United  States.  Federal  reserve  notes  unfit  for  circu- 
lation shall  be  returned  by  the  Federal  reserve  agents  to 
the  Comptroller  of  the  Currency  for  cancellation  and 
destruction. 

DEPOSITS  OF  GOLD  ITITH  TREASURER  FOR  REDEMPTION 
OF  FEDERAL  RESERYE  NOTES. 

616d.  The  Federal  Reserve  Board  shall  require  each  jgf  f  f^f-  2^3. 
Federal  reserve  bank  to  maintain  on  deposit  in  the  Treas-  38    'stat.'    l.', 
ury  of  the  United  States  a  sum  in  gold  sufficient  in  the  "^Ict  June  21, 
judgment  of  the  Secretary  of  the  Treasury  for  the  re-  ^^^'^>  ^ec  7. 
demption  of  the  Federal  reserve  notes  issued  to  such  bank, 
but  in  no  event  less  than  five  per  centum  of  the  total 
amount  of  notes  issued  less  the  amount  of  gold  or  gold 
certificates  held  by  the  Federal  reserve  agent  as  collateral 
security;  but  such  deposit  of  gold  shall  be  counted  and 
included  as  part  of  the  forty  per  centum  reserve  herein- 
before required. 

FEDERAL  RESERYE  BOARD  MAY  GRANT  OR  REJECT  AP- 
PLICATION OF  FEDERAL  RESERYE  BANK  FOR  FED- 
ERAL  RESERYE  NOTES.  FEDERAL  RESERYE  NOTES 
FIRST  LIEN  ON  ALL  THE  ASSETS  OF  THE  BANK. 

616e.  The  board  shall  have  the  right,  acting  through  ^g^^t  Dec  2^3, 
the  Federal  reserve  agent,  to  grant  in  whole  or  in  part,  38    'stat.'    l.', 
or  to  reject  entirely  the  application  of  any  Federal  re-  "^Ict  June  21, 
serve  bank  for  Federal  reserve  notes ;  but  to  the  extent  ^^^'^'  ^^c.  7. 
that  such  application  may  be  granted  the  Federal  Reserve 
Board  shall,  through  its  local  Federal  reserve  agent,  sup- 
ply Federal  reserve  notes  to  the  banks  so  applying,  and 
such  bank  shall  be  charged  with  the  amount  of  notes 
issued  to  it  and  shall  pay  such  rate  of  interest  as  may  be 
established  by  the  Federal  Reserve  Board  on  only  that 
amount  of  such  notes  which  equals  the  total  amount  of 
its  outstanding  Federal  reserve  notes  less  the  amount  of 
gold  or  gold  certificates  held  by  the  Federal  reserve  agent 
as  collateral  security.    Federal  reserve  notes  issued  to  any 


152  THE  FEDEKAL  RESERVE  ACT. 

such  bank  shall,  upon  delivery,  together  with  such  notes 
of  such  Federal  reserve  bank  as  may  be  issued  under  sec- 
tion eighteen  of  this  act  upon  security  of  United  States 
two  per  centum  Government  bonds,  become  a  first  and 
paramount  lien  on  all  the  assets  of  such  bank. 

REDUCTION  OF  NOTE  ISSUES. 

Act  Dec.  23,  616f.  Any  Federal  reserve  bank  may  at  any  time  reduce 
sl^^'sfaf'  ^L  *  i^  liability  for  outstanding  Federal  reserve  notes  by 
267.  ^  '  depositing  with  the  Federal  reserve  agent  its  Federal  re- 

1917,  sec?\r  '  serve  notes,  gold,  gold  certificates,  or  lawful  money  of  the 
United  States.  Federal  reserve  notes  so  deposited  shall 
not  be  reissued,  except  upon  compliance  with  the  condi- 
tions of  an  original  issue. 

The  Federal  reserve  agent  shall  hold  such  gold,  gold 
certificates,  or  lawful  money  available  exclusively  for  ex- 
change for  the  oustanding  Federal  reserve  notes  when 
offered  by  the  reserve  bank  of  which  he  is  a  director. 
Upon  the  request  of  the  Secretary  of  the  Treasury  the 
Federal  Reserve  Board  shall  require  the  Federal  reserve 
agent  to  transmit  to  the  Treasurer  of  the  United  States 
so  much  of  the  gold  held  by  him  as  collateral  security  for 
Federal  reserve  notes  as  may  be  required  for  the  exclusive 
purpose  of  the  redemption  of  such  Federal  reserve  notes, 
but  such  gold  when  deposited  with  the  Treasurer  shall  be 
counted  and  considered  as  if  collateral  security  on  deposit 
with  the  Federal  reserve  agent. 

SUBSTITUTION  OF  COLLATERAL.  ~      ' 

Act  Dec.  23,  616g.  Any  Federal  reserve  bank  may  at  its  discretion 
1913,  sec.  16 ;  withdraw  collateral  deposited  with  the  local  Federal  re- 
267.  "  "  serve  agent  for  the  protection  of  its  Federal  reserve  notes 
1917*  se"?\f ■^'  issued  to  it  and  shall  at  the  same  time  substitute  therefor 
other  collateral  of  equal  amount  with  the  approval  of  the 
Federal  reserve  agent  under  regulations  to  be  prescribed 
by  the  Federal  Eeserve  Board.  Any  Federal  reserve  bank 
may  retire  any  of  its  Federal  reserve  notes  by  depositing 
them  with  the  Federal  reserve  agent  or  with  the  Treasurer 
of  the  United  States,  and  such  Federal  reserve  bank  shall 
thereupon  be  entitled  to  receive  back  the  collateral  de- 
posited with  the  Federal  reserve  agent  for  the  security  of 
such  notes.  Federal  reserve  banks  shall  not  be  required 
to  maintain  the  reserve  or  the  redemption  fund  hereto- 
fore provided  for  against  Federal  reserve  notes  which 
have  been  retired.  Federal  reserve  notes  so  deposited 
shall  not  be  reissued  except  upon  compliance  with  the 
conditions  of  an  original  issue. 

All  Federal  reserve  notes  and  all  gold,  gold  certificates, 
and  lawful  money  issued  to  or  deposited  with  any  Fed- 
eral reserve  agent  under  the  provisions  of  the  Federal  re- 
serve act  shall  hereafter  be  held  for  such  agent,  under 


THE  FEDERAL  RESERVE  ACT.  153 

such  rules  and  regulations  as  the  Federal  Reserve  Board 
may  prescribe,  in  the  joint  custody  of  himself  and  the 
Federal  reserve  bank  to  which  he  is  accredited.  Such 
agent  and  such  Federal  reserve  bank  shall  be  jointly 
liable  for  the  safe-keeping  of  such  Federal  reserve  notes, 
gold,  gold  certificates,  and  lawful  money.  Nothing 
herein  contained,  however,  shall  be  construed  to  prohibit 
a  Federal  reserve  agent  from  depositing  gold  or  gold 
certificates  with  the  Federal  Eeserve  Board,  to  be  held 
by  such  board  subject  to  his  order,  or  with  the  Treasurer 
of  the  United  States  for  the  purposes  authorized  by  law, 

PEEPARATION  OF  FEDERAL  RESERYE  NOTES.  PLATES 
AND  DIES  TO  BE  UNDER  CONTROL  OF  COMPTROLLER 
OF  CURRENCY.  WHERE  NOTES  ARE  TO  BE  DEPOSITED. 

616h.  In  order  to  furnish  suitable  notes  for  circulation    Act  Dec.  23, 
as  Federal  reserve  notes,  the  Comptroller  of  the  Cur-  sl^^'st^at^'  ^l  ' 
rency  shall,  under  the  direction  of  the  Secretary  of  the  267. 
Treasury,  cause  plates  and  dies  to  be  engraved  in  the  i9i8rs"ec.''3.^^' 
best  manner  to  guard  against  counterfeits  and  fraudu- 
lent alterations,  and  shall  have  printed  therefrom  and 
numbered  such  quantities  of  such  notes  of  the  denomina- 
tions of  $5,  $10,  $20,  $50,  $100,  $500,  $1,000,  $5,000,  $10,000, 
as  may  be  required  to  supply  the  Federal  reserve  banks. 
Such  notes  shall  be  in  form  and  tenor  as  directed  by  the 
Secretary  of  the  Treasury  under  the  provisions  of  this 
Act  and  shall  bear  the  distinctive  numbers  of  the  several 
Federal  reserve  banks  through  which  they  are  issued. 

When  such  notes  have  been  prepared,  they  shall  be 
deposited  in  the  Treasurj^  or  in  the  subtreasury  or  mint 
of  the  United  States  nearest  the  place  of  business  of  each 
Federal  reserve  bank  and  shall  be  held  for  the  use  of 
such  bank  subject  to  the  order  of  the  Comptroller  of  the 
Currency  for  their  delivery,  as  provided  by  this  Act. 

The  plates  and  dies  to  be  procured  by  the  Comptroller 
of  the  Currency  for  the  printing  of  such  circulating 
notes  shall  remain  under  his  control  and  direction,  and 
the  expenses  necessarily  incurred  in  executing  the  laws 
relating  to  the  procuring  of  such  notes,  and  all  other 
expenses  incidental  to  their  issue  and  retirement,  shall 
be  paid  by  the  Federal  reserve  banks,  and  the  Federal 
Reserve  Board  shall  include  in  its  estimate  of  expenses 
levied  against  the  Federal  reserve  banks  a  sufficient 
amount  to  cover  the  expenses  herein  provided  for. 

The  examination  of  plates,  dies,  bed  pieces,  and  so 
forth,  and  regulations  relating  to  such  examination  of 
plates,  dies,  and  so  forth,  of  national-bank  notes  provided 
for  in  section  fifty-one  hundred  and  seventy-four  Revised 
Statutes,  is  hereby  extended  to  include  notes  herein  pro- 
vided for. 


154  THE  FEDERAL  RESERVE   ACT. 

APPEOPRIATION  FOR  EXPENSE  OF  PRINTING  NATIONAL- 
BANK  NOTES  MAY  BE  USED  FOR  PRINTING  FEDERAL 
RESERVE  NOTES. 

1913?  ?ec?'  i^6^i  6^6i*  -^^J  appropriation  heretofore  made  out  of  the 
38^  Stat."  L.;  general  funds  of  the  Treasury  for  engraving  plates  and 
dies,  the  purchase  of  distinctive  paper,  or  to  cover  any 
other  expense  in  connection  with  the  printing  of  na- 
tional-bank notes  or  notes  provided  for  by  the  Act  of 
May  thirtieth,  nineteenth  hundred  and  eight,  and  any 
distinctive  paper  that  may  be  on  hand  at  the  time  of  the 
passage  of  this  Act  may  be  used  in  the  discretion  of  the 
Secretary  for  the  purposes  of  this  Act,  and  should  the 
appropriations  heretofore  made  be  insufficient  to  meet 
the  requirements  of  this  Act  in  addition  to  circulating 
notes  provided  for  by  existing  law,  the  Secretary  is  here- 
by authorized  to  use  so  much  of  any  funds  in  the  Treas- 
ury not  otherwise  appropriated  for  the  purpose  of  fur- 
nishing the  notes  aforesaid:  Provided,  however,  That 
nothing  in  this  section  contained  shall  be  construed  as 
exempting  national  banks  or  Federal  reserve  banks  from 
their  liability  to  reimburse  the  United  States  for  any  ex- 
penses incurred  in  printing  and  issuing  circulating  notes. 

WHEN  FEDERAL  RESERVE  BANK  SHALL  RECEIVE 
CHECKS  AND  DRAFTS  ON  DEPOSIT  AT  PAR. 

lots!  sec!"  1^6^;  ^^^J-  Every  Federal  reserve  bank  shall  receive  on  de- 
S8  'stat.  L.,  posit  at  par  from  member  banks  or  from  Federal  reserve 
banks  checks  and  drafts  drawn  upon  any  of  its  depos- 
itors, and  when  remitted  by  a  Federal  reserve  bank, 
checks  and  drafts  drawn  by  any  depositor  in  any  other 
Federal  reserve  bank  or  member  bank  upon  funds  to  the 
credit  of  said  depositor  in  said  reserve  bank  or  member 
bank. 

CHARGES  FOR  COLLECTION  AND  FOR  SALE  OF  EX- 
CHANGE. 

im^  ^ec'  iQ-  ^1^^-  Nothing  herein  contained  shall  be  construed  as 
38  'stat."  L.',  prohibiting  a  member  bank  from  charging  its  actual 
^^^'  expense  incurred  in  collecting  and  remitting  funds,  or 

for  exchange  sold  to  its  patrons.  The  Federal  Reserve 
Board  shall,  by  rule,  fix  the  charges  to  be  collected  by 
the  member  banks  from  its  patrons  whose  checks  are 
cleared  through  the  Federal  reserve  bank  and  the  charge 
which  may  be  imposed  for  the  service  of  clearing  or  col- 
lection rendered  by  the  Federal  reserve  bank. 

FEDERAL  RESERVE  BOARD  MAT  EXERCISE  FUNCTIONS 
OF  A  CLEARING  HOUSE  AND  MAY  REQUIRE  FEDERAL 
RESERVE  BANKS  TO  EXERCISE  SUCH  FUNCTIONS. 

6161.  The  Federal  Reserve  Board  shall  make  and  pro- 
mulgate from  time  to  time  regulations  governing  the 
transfer  of  funds  and  charges  therefor  among  Federal 


THE  FEDERAL,  RESERVE  ACT.  155 

reserve  banl«  and  their  branches,  and  may  at  its  dis- 
cretion exercise  the  functions  of  a  clearing  house  for 
such  Federal  reserve  banks,  or  may  designate  a  Federal 
reserve  bank  to  exercise  such  functions,  and  may  also 
require  each  such  bank  to  exercise  the  functions  of  a 
clearing  house  for  its  member  banks. 

SECRETARY  OF  THE  TREASURY  TO  RECEIYE  DEPOSITS 
OF  GOLD  COIN  OR  GOLD  CERTIFICATES  WITH  THE 
TREASURER  OR  ASSISTANT  TREASURER  OF  UNITED 
STATES  WHEN  TENDERED  BY  ANY  FEDERAL  RESERVE 
BANK  OR  FEDERAL  RESERVE  AGENT  FOR  CREDIT  TO 
ITS  OR  HIS  ACCOUNT  WITH  THE  FEDERAL  RESERVE 
BOARD. 

616m.  That  the  Secretary  of  the  Treasury  is  hereby  igf^^g-J^^I  ^L 
authorized  and  directed  to  receive  deposits  of  gold  coin  or 
of  gold  certificates  with  the  Treasurer  or  any  assistant 
treasurer  of  the  United  States  when  tendered  by  any 
Federal  reserve  bank  or  Federal  reserve  agent  for  credit 
to  its  or  his  account  with  the  Federal  Reserve  Board. 
The  Secretary  shall  prescribe  by  regulation  the  form  of 
receipt  to  be  issued  by  the  Treasurer  or  Assistant  Treas- 
urer to  the  Federal  reserve  bank  or  Federal  reserve  agent 
making  (he  deposit,  and  a  duplicate  of  such  receipt  shall 
be  delivered  to  the  Federal  Reserve  Board  by  the  Treas- 
urer at  Washington  upon  proper  advices  from  any  as- 
sistant treasurer  that  such  deposit  has  been  made.  De- 
posits so  made  shall  be  held  subject  to  the  orders  of 
the  Federal  Reserve  Board  and  shall  be  payable  in  gold 
coin  or  gold  certificates  on  the  order  of  the  Federal 
Reserve  Board  to  any  Federal  reserve  bank  or  Federal 
reserve  agent  at  the  Treasury  or  at  the  Subtreasury  of 
the  United  States  nearest  the  place  of  business  of  such 
Federal  reserve  bank  or  such  Federal  reserve  agent :  Pro- 
vided^ however^  That  anj^  expense  incurred  in  shipping 
gold  to  or  from  the  Treasury  or  subtreasuries  in  order  to 
make  such  payments,  or  as  a  result  of  making  such  pay- 
ments, shall  be  paid  by  the  Federal  Reserve  Board  and 
assessed  against  the  Federal  reserve  banks.  The  order 
used  by  the  Federal  Reserve  Board  in  making  such  pay- 
ments shall  be  signed  by  the  governor  or  vice  governor, 
or  such  other  officers  or  members  as  the  board  may  by 
regulation  prescribe.  The  form  of  such  order  shall  be 
approved  by  the  Secretary  of  the  Treasury. 

The  expenses  necessarily  incurred  in  carrying  out  these 
provisions,  including  the  cost  of  the  certificates  or  re- 
ceipts issued  for  deposits  received,  and  all  expenses  inci- 
dent to  the  handling  of  such  deposits  shall  be  paid  by 
the  Federal  Reserve  Board  and  included  in  its  assess- 
ments against  the  several  Federal  reserve  banks. 

Gold  deposits  standing  to  the  credit  of  any  Federal 
reserve  bank  with  the  Federal  Reserve  Board  shall,  at 
the  option  of  said  bank,  be  counted  as  part  of  the  lawful 
reserve  which  it  is  required  to  maintain  against  outstand- 


156  THE   FEDERAL   RESERVE  ACT. 

ing  Federal  reserve  nx>tes,  or  as  part  of  the  reserve  it  is 
required  to  maintain  against  deposits. 

Nothing  in  this  section  shall  be  construed  as  amend- 
ing section  six  of  the  act  of  March  fourteenth,  nineteen 
hundred,  as  amended  by  the  acts  of  March  fourth,  nine- 
teen hundred  and  seven,  March  second,  nineteen  hundred 
and  eleven,  and  June  twelfth,  nineteen  hundred  and  six- 
teen, nor  shall  the  provisions  of  this  section  be  construed 
to  apply  to  the  deposits  made  or  to  the  receipts  or  cer- 
tificates issued  under  those  acts. 

NATIONAL  BANKS  NOT  REQUIRED  TO  MAKE  DEPOSIT  OF 
UNITED  STATES  BONDS  PRIOR  TO  COMMENCEMENT  OF 
BUSINESS. 

1913*  ?ec^'  u-     ^^^'  ^^^'   ^'^' — ^^  much  of  the  provisions  of  section 
38    Stat."    L.|  fifty-one  hundred  and  fifty-nine  of  the  Eevised  Statutes 
"^ict  June  21,  ^f  the  United  States,  and  section  four  of  the  act  of  June 
1917,  sec,  9.     '  twentieth,  eighteen  hundred  and  seventy-four,  and  sec- 
tion eight  of  the  act  of  July  twelfth,  eighteen  hundred 
and  eighty-two,  and  of  any  other  provisions  of  existing 
statutes  as  require  that  before  any  national  banking  asso- 
ciation shall  be  authorized  to  commence  banking  busi- 
ness it  shall  transfer  and  deliver  to  the  Treasurer  of  the 
United  States  a  stated  amount  of  United  States  regis- 
tered bonds,  and  so  much  of  those  provisions  or  of  any 
other  provisix3ns  of  existing  statutes  as  require  any  na- 
tional banking  association  now  or  hereafter  organized  to 
maintain  a  minimum  deposit  of  such  bonds  with  the 
Treasurer  is  hereby  repealed. 

REFUNDING   BONDS. 

RETIREMENT  OF  CIRCULATING  NOTES. 

igfs*  sec*^'  1^8^'  ^^^-  ^^^'  ^^' — -^fter  two  years  from  the  passage  of  this 
38  Stat.'  L.',  Act,  and  at  any  time  during  a  period  of  twenty  years 
thereafter,  any  member  bank  desiring  to  retire  the  whole 
or  any  part  of  its  circulating  notes,  may  file  with  the 
Treasurer  of  the  United  States  an  application  to  sell  for 
its  account,  at  par  and  accrued  interest,  United  States 
bonds  securing  circulation  to  be  retired. 

PURCHASE  OF  UNITED  STATES  BONDS  BY  FEDERAL  RE- 
SERVE BANKS. 

19^3*  ?ec'  il^'  ^^^^-  "^^^^  Treasurer  shall,  at  the  end  of  each  quarterly 
38  'stat.'  L.;  period,  furnish  the  Federal  Reserve  Board  with  a  list  of 
such  applications,  and  the  Federal  Reserve  Board  may, 
in  its  discretion,  require  the  Federal  reserve  banks  to 
purchase  such  bonds  from  the  banks  whose  applications 
have  been  filed  with  the  Treasurer  at  least  ten  days  before 
the  end  of  any  quarterly  period  at  which  the  Federal 
Reserve  Board  may  direct  the  purchase  to  be  made: 
Provided,  That  Federal  reserve  banks  shall  not  be  per- 
mitted to  purchase  an  amount  to  exceed  $25,000,000  of 
such  bonds  in  any  one  year,  and  wliich  amount  shall 


THE  FEDERAL  RESERVE  ACT.  157 

include  bonds  acquired  under  section  four  of  this  Act  by 
the  Federal  reserve  bank. 

Provided  further^  That  the  Federal  Reserve  Board 
shall  allot  to  each  Federal  reserve  bank  such  proportion 
of  such  bonds  as  the  capital  and  surplus  of  such  bank 
shall  bear  to  the  aggregate  capital  and  surplus  of  all  tho 
Federal  reserve  banks. 

Upon  notice  from  the  Treasurer  of  the  amount  of  bonds 
so  sold  for  its  account,  each  member  bank  shall  duly 
assign  and  transfer,  in  writing,  such  bonds  to  the  Federal 
reserve  bank  purcliasing  the  same,  and  such  Federal 
reserve  bank  shall,  thereupon,  deposit  lawful  money  with 
the  Treasurer  of  the  United  States  for  the  purchase  price 
of  such  bonds,  and  the  Treasurer  shall  pay  to  the  member 
bank  selling  such  bonds  any  balance  due  after  deducting 
a  sufficient  sum  to  redeem  its  outstanding  notes  secured 
by  such  bonds,  which  notes  shall  be  canceled  and  perma- 
nently retired  when  redeemed. 

ISSUE  OF  CIRCULATING  NOTES  TO  FEDERAL  RESERTE 
BANKS  ON  SECURITY  OF  UNITED  STATES  BONDS.  CIR- 
CULATING NOTES  SO  ISSUED  OBLIGATIONS  OF  FED- 
ERAL RESERVE  BANK. 

618b.  The  Federal  reserve  banks  purchasing  such  bonds  _4S*  ^^^-  ?o' 

.         ,  ,  ^  ,       f      •         ^    j_-         lylo,    sec.    1» ; 

shall  be  permitted  to  take  out  an  amount  oi  circulating  ss     stat.     l., 
notes  equal  to  the  par  value  of  such  bonds.  ^^^' 

Upon  the  deposit  with  the  Treasurer  of  the  United 
States  of  bonds  so  purchased,  or  any  bonds  with  the  cir- 
culating privilege  acquired  under  section  four  of  this  act, 
any  Federal  reserve  bank  making  such  deposit  in  the 
manner  provided  by  existing  law,  shall  be  entitled  to 
receive  from  the  Comptroller  of  the  Currency  circulating 
notes  in  blank,  registered  and  countersigned  as  provided 
by  law,  equal  in  amount  to  the  par  value  of  the  bonds  so 
deposited.^  Such  notes  shall  be  the  obligations  of  the 
Federal  reserve  bank  procuring  the  same,  and  shall  be  in 
form  prescribed  b}'  the  Secretary  of  the  Treasury,  and  to 
the  same  tenor  and  effect  as  national-bank  notes  now 
provided  b}'  law.  They  shall  be  issued  and  redeemed 
under  the  same  terms  and  conditions  as  national-bank 
notes  except  that  they  shall  not  be  limited  to  the  amount 
of  the  capital  stock  of  the  Federal  reserve  bank  issuing 
them. 

ISSUE  OF  ONE-YEAR  GOLD  NOTES  AND  THREE  PER  CENT 
BONDS  OF  THE  UNITED  STATES  IN  EXCHANGE  FOR 
TWO  PER  CENT  UNITED  STATES  BONDS. 

618c.  Upon  application  of  any  Federal  reserve  bank,  19^0*  ^^^  fi\ 
approved  by  the  Federal  Reserve  Board,  the  Secretary  ss  stat.  l.. 
of  the  Treasury  may  issue,  in  exchange  for  United  States 

*  Under  act  of  Apr.  23,  1918,  Federal  reserve  banks  may  issue 
Federal  reserve  bank  notes  in  any  denominations,  includin.Er  .$1 
find  .?2.  against  the  security  of  United  States  certificates  of  iU' 
debtedness  to  the  extent  permitted  by  that  act. 


158  THE  FEDERAL  RESERVE  ACT. 

two  per  centum  gold  bonds  bearing  the  circulation  privi- 
lege, but  against  which  no  circulation  is  outstanding, 
one-year  gold  notes  of  the  United  States  without  the 
circulation  privilege,  to  an  amount  not  to  exceed  one- 
half  of  the  two  per  centum  bonds  so  tendered  for  ex- 
change, and  thirty-year  three  per  centum  gold  bonds 
without  the  circulation  privilege  for  the  remainder  of  the 
two  per  centum  bonds  so  tendered:  Provided,  That  at 
the  time  of  such  exchange  the  Federal  reserve  bank  ob- 
taining such  one-year  gold  notes  shall  enter  into  an  obli- 
gation with  the  Secretary  of  the  Treasury  binding  itself 
to  purchase  from  the  United  States  for  gold  at  the  ma- 
turity of  such  one-year  notes,  an  amount  equal  to  those 
delivered  in  exchange  for  such  bonds,  if  so  requested  by 
the  Secretary,  and  at  each  maturity  of  one-year  notes  so 
purchased  by  such  Federal  reserve  bank,  to  purchase 
from  the  United  States  such  an  amount  of  one-year  notes 
as  the  Secretary  may  tender  to  such  bank,  not  to  exceed 
the  amount  issued  to  such  bank  in  the  first  instance,  in 
exchange  for  the  two  per  centum  United  States  gold 
bonds;  said  obligation  to  purchase  at  maturity  such 
notes  shall  continue  in  force  for  a  period  not  to  exceed 
thirty  years. 

For  the  purpose  of  making  the  exchange  herein  pro- 
vided for,  the  Secretary  of  the  Treasury  is  authorized  to 
issue  at  par  Treasury  notes  in  coupon  or  registered  form 
as  he  may  prescribe  in  denominations  of  one  hundred 
dollars,  or  any  multiple  thereof,  bearing  interest  at  the 
rate  of  three  per  centum  per  annum,  payable  quarterly, 
such  Treasury  notes  to  be  payable  not  more  than  one  year 
from  the  date  of  their  issue  in  gold  coin  of  the  present 
standard  value,  and  to  be  exempt  as  to  principal  and 
interest  from  the  payment  of  all  taxes  and  duties  of  the 
United  States  except  as  provided  by  this  act,  as  well  as 
from  taxes  in  any  form  by  or  under  State,  municipal,  or 
local  authorities.  And  for  the  same  purpose,  the  Secre- 
tary is  authorized  and  empowered  to  issue  United  States 
gold  bonds  at  par,  bearing  three  per  centum  interest  pay- 
able thirty  years  from  date  of  issue,  such  bonds  to  be  of 
the  same  general  tenor  and  effect  and  to  be  issued  under 
the  same  general  terms  and  conditions  as  the  United 
States  three  per  centum  bonds  without  the  circulation 
privilege  now  issued  and  outstanding 

EXCHANGE  OF  THREE  PER  CENT  BONDS  FOR  ONE-YEAR 
GOLD  NOTES. 

618q.  Upon  application  of  any  Federal  reserve  bank, 
approved  by  the  Federal  Reserve  Board,  the  Secretary 
may  issue  at  par  such  three  per  centum  bonds  in  ex- 
change for  the  one-year  gold  notes  herein  provided  for. 


THE   FEDERAL  RESERVE   ACT*  159 

BANK    RESERVES. 

DEMAND  AND  TIME  DEPOSITS  DEFINED— RESERYE  RE- 
QUIREMENTS—WHEN EFFECTIVE. 

619.  Sec.  19. — Demand  deposits  within  the  meaning  of  j^^^*  ^^*=-  ^^^r 
this  act  shall  comprise  all  deposits  payable  within  thirty  38    'stat.'    l.', 
days,  and  time  deposits  shall  comprise  all  deposits  pay-     Act  June  21, 
able   after  thirty   days,  all  savings  accounts  and  cer-  ^^i"^'  ^^^-  i^* 
tificates  of  deposit  which  are  subject  to  not  less  than 
thirty  days'  notice  before  payment,  and  all  postal  savings 
deposits.^ 

Every  bank,  banking  asociation,  or  trust  company 
which  is  or  which  becomes  a  member  of  any  Federal  re- 
serve bank  shall  establish  and  maintain  reserve  balances 
with  its  Federal  reserve  bank  as  follows: 

RESERYE  REQUIREMENTS  FOR  BANKS  NOT  IN  RESERYE 
CITIES. 

619a.   (a)  If  not  in  a  reserve  or  central  reserve  city,    Act  Dec.  2.3. 
as  now  or  hereafter  defined,  it  shall  hold  and  maintain  38    'stat."    l.) 
with  the  Federal  reserve  bank  of  its  district  an  actual  net  ^"^^^  june  21 
balance  equal  to  not  less  than  seven  per  centum  of  the  i9i7,  sec.  10. ' 
aggregate  amount  of  its  demand  deposits  and  three  per 
centum  of  its  time  deposits. 

RESERYE    REQUIREMENTS    FOR    BANKS    IN    RESERYE 
CITIES. 

619b.   (h)  If  in  a  reserve  city,  as  now  or  hereafter  ^^Act  Dec.  ^2^3. 
defined,  it  shall   hold   and  maintain   with  the  Federal  38     stat.'    l.' 
reserve  bank  of  its  district  an  actual  net  balance  equal  to  "'Act  Aug.  15. 
not  less  than  ten  per  centum  of  the  aggregate  amount  of  J^^i'^^j^^^^t^*' 
its  demand  deposits  and  three  per  centum  of  its  time    Act  June  21, 
deposits:  Provided,  hoicever,  That  if  located  in  the  outly-  ^^ict  lept.^26, 
ing  districts  of  a  reserve  city  or  in  territory  added  to  such  i^is,  sec.  4. 
a  city  by  the  extension  of  its  corporate  charter,  it  may, 
upon  the  affirmative  vote  of  five  members  of  the  Federal 
Reserve  Board,  hold  and  maintain  the  reserve  balances 
specified  in  paragraph  {a)  hereof. 

KESERYE  REQUIREMENTS  FOR  BANKS  IN  CENTRAL  RE- 
SERYE CITIES. 

619c.  {c)  If  in  a  central  reserve  city,  as  now  or  here-  Act  Dec.  23, 
after  defined,  it  shall  hold  and  maintain  with  the  Federal  ss^^'staT  ^l.! 
reserve  bank  of  its  district  an  actual  net  balance  equal  -"^^^^^  ^^„  jg' 
to  not  less  than  thirteen  per  centum 'of  the  aggregate  i9i4:  *38''stat! 
amount  of  its  demand  deposits  and  three  per  centum  of  ^" Act^June  21. 
its  time  deposits :  Provided,  however,  That  if  located  in  ^^^^/^  ^'^f-,  ^\-^ 
the  outlying  districts  of  a  central  reserve  city  or  in  tern-  lo'is,  sec.  4. "  ' 

*  Government  deposits  other  than  postal  savings  deposits  are 
not  subject  to  reserve  reciuirenients.  See  section  7  of  First  Lib- 
erty Bond  act,  approved  Apr.  24 ,  1917 ;  section  8  of  Second  Liberty 
Bond  act,  approved  Sept.  24,  1917,  and  section  8  of  Third  Liberty 
Bond  act,  approved  Apr.  4,  1918. 


160  THE  FEDERAL  RESERVE  ACT. 

tory  added  to  such  city  by  the  extension  of  its  corporate 
charter,  it  may,  upon  the  affirmative  vote  of  five  members 
of  the  Federal  Reserve  Board,  hold  and  maintain  the 
reserve  balances  specified  in  paragraphs  {a)  or  (&) 
thereof. 

MEMBER  BANK  FORBIDDEN  TO  KEEP  ON  DEPOSIT  WITH 
NONMEMBER  BANK  A  SUM  IN  EXCESS  OF  TEN  PER 
CENT  OF  ITS  OWN  CAPITAL  AND  SURPLUS  OR  TO  SE- 
CURE DISCOUNTS  FOR  NONMEMBER  BANK. 

1913*  s^*^'  1^9  •  619d.  No  member  bank  shall  keep  on  deposit  with  any 
S8  'stat.'  L.',  State  bank  or  trust  company  which  is  not  a  member  bank 
^^Act  Aug.  15,  a  sum  in  excess  of  ten  per  centum  of  its  own  paid-up 
L^^l^i^^  ^t^t- capital  and  surplus.  No  member  bank  shall  act  as  the 
Act  June  21,  medium  or  agent  of  a  nonmember  bank  in  applying  for 
1917,  sec.  10.     ^^,  receiving  discounts  from  a  Federal  reserve  bank  under 

the  provisions  of  this  Act,  except  by  permission  of  the 

Federal  Reserve  Board. 

WITHDRAWAL  OF  RESERYE  BY  MEMBER  BANK. 

Act  Dec.  23,      619e.  The  required  balance  carried  by  a  member  bank 
ss'  'stau    L.',  with  a  Federal  reserve  bank  may,  under  the  regulations 
^^Act.  Aug.  15,  and  subject  to  such  penalties  as  may  be  prescribed  by  the 
1914  ;*  38  "stat!  Federal  Reserve  Board,  be  checked  against  and  with- 
^■'Act^june  21,  drawu  by  such  member  bank  for  the  purpose  of  meeting 
1917,  sec.  10,    existing   liabilities :   Provided,  however,  That  no  bank 
shall  at  any  time  make  new  loans  or  shall  pay  any  divi- 
dends unless  and  until  the  total  balance  required  by  law 
is  fully  restored. 

RESERYE  REQUIREMENT— HOW  ESTIMATED. 

Act  Dec.  23,  619f.  In  estimating  the  balances  required  by  this  Act, 
38^' stat.*  L.',  the  net  difference  of  amounts  due  to  and  from  other 
^Act  Aug.  15,  banks  shall  be  taken  as  the  basis  for  ascertaining  the 
1914;  38  stat!  deposits  against  which  required  balances  with  Federal 

Act  June  21,  rescrve  banks  shall  be  determined, 

1917,  sec.  10. 

RESERYE  REQUIREMENTS  FOR  NATIONAL  BANKS  LO- 
CATED IN  ALASKA  OR  OUTSIDE  THE  CONTINENTAL 
UNITED  STATES. 

1913*  sec^"  1^9^'     619g.  National  banks,  or  banks  organized  under  local 

38     stat."    L.',  laws,  located  in  Alaska  or  in  a  dependency  or  insular 

^^Act  Aug.  15,  possession  or  any  part  of  the  United  States  outride  the 

1914^^^38  stat.  continental  United  States  may  remain  nonmember  banks. 

Act  June  21,  and  shall  in  that  event  maintain  reserves  and  comply 

1917,  sec.  10,  ^-^j^  rj^Yi  the  conditions  now  provided  by  law  regulating 

them ;  or  said  banks  may,  with  the  consent  of  the  Reserve 

Board,  become  member  banks  of  any  one  of  the  reserve 

districts,  and  shall  in  that  event  take  stock,  maintain 

reserves,  and  be  subject  to  all  the  other  provisions  of  this 

act. 


THE  FEDERAL  RESERVE  ACT.  161 

REDEMPTION  FUND  WITH  TREASURER  NOT  TO  BE 
COUNTED  AS  RESERVE. 

620.  Sec.  20. — So  much  of  sections  two  and  three  of  the  .A9.^  P^<^-  23. 
Act  of  June  twentieth,  eighteen  hundred  and  seventy- 38  stat  l., 
four,  entitled  "  An  Act  fixing  the  amount  of  United  States  ^^^' 

notes,  providing  for  a  redistribution  of  the  national-bank 
currency,  and  for  other  purposes,"  as  provides  that  the 
fund  deposited  by  any  national  banking  association  with 
the  Treasurer  of  the  United  States  for  the  redemption  of 
its  notes  shall  be  counted  as  a  part  of  its  lawful  reserve 
as  provided  in  the  Act  aforesaid,  is  hereby  repealed.  And 
from  and  after  the  passage  of  this  Act  such  fund  of  five 
per  centum  shall  in  no  case  be  counted  by  any  national 
banking  association  as  a  part  of  its  lawful  reserve. 

BANK    EXAMINATIONS. 

APPOINTMENT  AND  POWERS  OF  EXAMINERS— ACCEPT- 
ANCE  OF  REPORTS  OF  EXAMINATIONS  BY  STATE 
AUTHORITY. 

621.  Sec.  21.— Section  fifty-two  hundred  and  forty,  jg^ct  Dec.  23, 
United  States  Revised  Statutes,  is  amended  to  read  as  38  'stat.'  l.) 
follows:  _  ^'^^' 

The  Comptroller  of  the  Currency,  with  the  approval  of 
the  Secretary  of  the  Treasury,  shall  appoint  examiners 
who  shall  examine  every  member  bank  ^  at  least  twice  in 
each  calendar  year  and  oftener  if  considered  necessary: 
Provided,  however,  That  the  Federal  Reserve  Board  may 
authorize  examination  by  the  State  authorities  to  be 
accepted  in  the  case  of  State  banks  and  trust  companies 
and  may  at  any  time  direct  the  holding  of  a  special  ex- 
amination of  State  banks  or  trust  companies  that  are 
stockholders  in  any  Federal  reserve  bank.  The  examiner 
making  the  examination  of  any  national  bank,  or  of  any 
other  member  bank,  shall  have  power  to  make  a  thorough 
examination  of  all  the  affairs  of  the  bank,  and  in  doing  so 
he  shall  have  power  to  administer  oaths  and  to  examine 
any  of  the  officers  and  agents  thereof  under  oath  and 
shall  make  a  full  and  detailed  report  of  the  condition  of 
said  bank  to  the  Comptroller  of  the  Currency. 

SALARIES  OF  BANK  EXAMINERS. 

621a.  The  Federal  Reserve  Board,  upon  the  recom-    Act  Dec.  23, 
mendation  of  the  Comptroller  of  the  Currency,  shall  fix  38    'stot.'  "l.'. 
the  salaries  of  all  bank  examiners  and  make  report  thereof  ^^^' 
to  Congress.     The  expense  of  the  examinations  herein 
provided  for  shall  be  assessed  by  the  Comptroller  of  the 
Currency   upon   the  banks  examined   in   proportion   to 
assets  or  resources  held  by  the  banks  upon  the  dates  of 
examination  of  the  various  banks. 

*  Except  banks  admitted  to  membership  In  the  system  under  au- 
thority of  section  9  of  this  act.  See  section  9  of  this  act  U3 
amended  by  act  approved  June  21,  1917. 

Ift4312°— 20 11 


162  THE  FEDERAL,  RESERVE   ACT. 

EXAMINATIONS  BY  FEDERAL  EESERYE  BANK. 

1913!  sec^'  ill  ^2 lb.  In  addition  to  the  examinations  made  and  con- 
272  '^^^'  ^-'d^^^ted  by  the  Comptroller  of  the  Currency,  every  Fed- 
eral reserve  bank  may,  with  the  approval  of  the  Federal 
reserve  agent  or  the  Federal  Reserve  Board,  provide  for 
special  examination  of  member  banks  within  its  district. 
The  expense  of  such  examinations  shall  be  borne  by  the 
bank  examined.  Such  examinations  shall  be  so  con- 
ducted as  to  inform  theFederal  reserve  bank  of  the  con- 
dition of  its  member  banks  and  of  the  lines  of  credit 
■which  are  being  extended  by  them.  Every  Federal  re- 
serve bank  shall  at  all  times  furnish  to  the  Federal  Re- 
serve Board  such  information  as  may  be  demanded  con- 
cerning the  condition  of  any  member  bank  within  the 
district  of  the  said  Federal  reserve  bank. 

No  bank  shall  be  subject  to  any  visitatorial  powers 
other  than  such  as  are  authorized  by  law,  or  vested  in  the 
courts  of  justice  or  such  as  shall  be  or  shall  have  been 
exercised  or  directed  by  Congi-ess,  or  by  either  House 
thereof  or  by  any  cormnittee  of  Congress  or  of  either 
House  duly  authorized. 

EXAMINATIONS  OF  FEDERAL  RESERTE  BANKS. 

1913*  fee'  2^1^'  ^^^°'  '^^^  Federal  Reserve  Board  shall,  at  least  once 
38  Stat."  L.',  each  year,  order  an  examination  of  each  Federal  reserve 
^^^*  bank,  and  upon  joint  application  of  ten  member  banks 

the  Federal  Reserve  Board  shall  order  a  special  examina- 
tion and  report  of  the  condition  of  any  Federal  reserve 
bank. 

MEMBER    BANK    CAN    NOT    MAKE    LOAN    OR    GRANT    A 
GRATUITY  TO  ANY  NATIONAL  BANK  EXAMINER. 

,^4S*  ^^^-  ^^'  622.  Sec.  22a. — No  member  bank  and  no  officer,  direc- 
38  'stat.'  L.',  tor,  or  employee  thereof  shall  hereafter  make  any  loan  or 
^^\ct  se  t  26  S^^^^  ^^J  gratuity  to  any  bank  examiner.  Any  bank 
1918,  sec?  5.  '  officer,  director,  or  employee  violating  this  provision 
shall  be  deemed  guilty  of  a  misdemeanor  and  shall  be 
imprisoned  not  exceeding  one  year  or  fined  not  more  than 
$5,000,  or  both ;  and  may  be  fined  a  further  sum  equal  to 
the  money  so  loaned  or  gratuity  given.  Any  examiner 
accepting  a  loan  or  gratuity  from  any  bank  examined  by 
him  or  from  an  officer,  director,  or  employee  thereof  shall 
be  deemed  guilty  of  a  misdemeanor  and  shall  be  im- 
prisoned one  year  or  fined  not  more  than  $5,000,  or  both, 
and  may  be  fined  a  further  sum  equal  to  the  money  so 
loaned  or  gratuity  given,  and  shall  forever  thereafter 
be  disqualified  from  holding  office  as  a  national-bank 
examiner. 


THE  FEDERAL  RESERVE  ACT.  163 

NATIONAL  BANK  EXAMINER  CAN  NOT  PERFORM  ANT 
SERVICE  FOR  COMPENSATION  FOR  ANY  RANK  OR 
OFFICER.  EXAMINER  CAN  NOT  DISCLOSE  THE  NAMES 
OF  BORROWERS,  OR  COLLATERAL  WITHOUT  FIRST 
OBTAINING   WRITTEN  CONSENT  OF   COMPTROLLER. 

622b.  No  national  bank  examiner  shall  perform  any    Act  Sept.  26, 
other  service  for  compensation  while  holding  such  office        '  ^**^   " 
for  any  bank  or  officer,  director,  or  employee  thereof. 

No  examiner,  public  or  private,  shall  disclose  the 
names  of  borrowers  or  the  collateral  for  loans  of  a  mem- 
ber bank  to  other  than  the  proper  officers  of  such  bank 
without  first  having  obtained  the  express  permission  in 
writing  from  the  Comptroller  of  the  Currency,  or  from 
the  board  of  directors  of  such  banl^,  except  when  ordered 
to  do  so  by  a  court  of  competent  jurisdiction,  or  by 
direction  of  the  Congress  of  the  United  States,  or  of 
either  House  thereof,  or  any  committee  of  Congi'ess,  or 
of  either  House  duly  authorized.  Any  bank  examiner 
violating  the  provisions  of  this  subsection  shall  be  im- 
prisoned not  more  than  one  year  or  fined  not  more  than 
$5,000,  or  both. 

PENALTY  FOR  OFFICER,  DIRECTOR,  OR  EMPLOYEE  OF 
MEMBER  BANK  WHO  RECEIVES  ANY  COMMISSION  OR 
GIFT  IN  CONNECTION  WITH  ANY  LOAN. 

622c.  Except  as  herein  provided,  any  officer,  director  Act  Sept.  26, 
employee,  or  attorney  of  a  member  bank  who  stipulates  ^^^^'  ^^'^'  ^' 
for  or  receives  or  consents  or  agrees  to  receive  any  fee, 
commission,  gift,  or  thing  of  value  from  any  person,  firm, 
or  corporation,  for  procuring  or  endeavoring  to  procure 
for  such  person,  firm,  or  corporation,  or  for  any  other 
person,  firm,  or  corporation,  any  loan  from  or  the  pur- 
chase or  discount  of  any  paper,  note,  draft,  check,  or 
bill  of  exchange  by  such  member  bank  shall  be  deemed 
guilty  of  a  misdemeanor  and  shall  be  imprisoned  not 
more  than  one  year  or  fined  not  more  than  $5,000,  or 
both. 

PURCHASE  OF  SECURITIES  OR  PROPERTY  FROM  ONE  OP 
ITS  DIRECTORS,  OR  SALES  TO  A  DIRECTOR  BY  A  MEM- 
BER BANK. 

622d.  Any  member  bank  may  contract  for,  or  purchase  Act  Sept.  26. 
from,  any  of  its  directors  or  from  any  firm  of  which  any  ^^^^'  '***^  ^" 
of  its  directors  is  a  member,  any  securities  or  other 
property,  when  (and  not  otherwise)  such  purchase  is 
made  in  the  regular  course  of  business  upon  terms  not 
less  favorable  to  the  bank  than  those  offered  to  otliers, 
or  when  such  purchase  is  authorized  by  a  majority  of  the 
board  of  directors  not  interested  in  the  sale  of  such 
securities  or  property,  such  authority  to  be  evidenced 
by  the  affirmative  vote  or  written  assent  of  such  directors : 
Provided,  hmvever,  That  when  any  director,  or  firm  of 
which  any  director  is  a  member,  acting  for  or  on  behalf 


164  THE  FEDERAL  RESERVE    kCT.  ' 

of  others,  sells  securities  or  other  property  to  a  member 
bank,  the  Federal  Reserve  Board  by  regulation  may, 
in  any  or  all  cases,  require  a  full  disclosure  to  be  made, 
on  forms  to  be  prescribed  by  it,  of  all  commissions  or 
other  considerations  received,  and  whenever  such  director 
or  firm,  acting  in  his  or  its  own  behalf,  sells  securities 
or  other  property  to  the  bank  the  Federal  Reserve  Board 
by  regulation,  may  require  a  full  disclosure  of  all  profit 
realized  from  such  sale. 

Any  member  bank  may  sell  securities  or  other  property 
to  any  of  its  directors,  or  to  a  firm  of  which  any  of  its 
directors  is  a  member,  in  the  regular  course  of  business 
on  terms  not  more  favorable  to  such  director  or  firm 
than  those  offered  to  others,  or  when  such  sale  is  author- 
ized by  a  majority  of  the  board  of  directors  of  a  member 
bank  to  be  evidenced  by  their  affirmative  vote  or  written 
assent:  Provided,  however,  That  nothing  in  this  subsec- 
tion contained  shall  be  construed  as  authorizing  member 
banks  to  purchase  or  sell  securities  or  other  property 
■which  such  banks  are  not  otherwise  authorized  by  law 
to  purchase  or  sell. 

RATE  OF  INTEREST  PAID  DIRECTORS,  OFFICERS,  OR 
EMPLOYEES  NOT  TO  EXCEED  THAT  PAID  TO  OTHER 
DEPOSITORS. 

1918,  sec.  *  5.  '  622e.  No  member  bank  shall  pay  to  any  director,  officer, 
attorney,  or  employee  a  greater  rate  of  interest  on  the 
deposits  of  such  director,  officer,  attorney,  or  employee 
than  that  paid  to  other  depositors  on  similar  deposits 
with  such  member  bank. 

PENALTY  FOR  VIOLATION  OF  ANY  OF  THE  PROVISIONS 
OF  SECTION  22  OF  THE  FEDERAL  RESERVE  ACT. 

19^8*860^5.^^'  622f.  If  the  directors  or  officers  of  any  member  bank 
shall  knowingly  violate  or  permit  any  of  the  agents, 
officers,  or  directors  of  any  member  bank  to  violate  any 
of  the  provisions  of  this  section  or  regulations  of  the 
board  made  under  authority  thereof,  every  director  and 
officer  participating  in  or  assenting  to  such  violation 
shall  be  held  liable  in  his  personal  and  individual  ca- 
pacity for  all  damages  which  the  member  bank,  its  share- 
holders, or  any  other  persons  shall  have  sustained  in  con- 
sequence of  such  violation. 

LIABILITY  OF  STOCKHOLDERS  OF  NATIONAL  BANKS. 

19^3*  8^cf"  2?:  ^23.  Sec.  23.— The  stockholders  of  every  national  bank- 
278  '^****  ^■'  ^^^  association  shall  be  held  individually  responsible  for 
all  contracts,  debts,  and  engagements  of  such  association, 
each  to  the  amount  of  his  stock  therein,  at  the  par  value 
thereof  in  addition  to  the  amount  invested  in  such  stock. 
The  stockholders  in  any  national  banking  association 
who  shall  have  transferred  their  shares  or  registered  the 
transfer  thereof  within  sixty  days  next  before  the  date  of 


THE  FEDERAL  RESERVE  ACT.  165 

the  failure  of  such  association  to  meet  its  obligations,  or 
with  knowledge  of  such  impending  failure,  shall  be  liable 
to  the  same  extent  as  if  they  had  made  no  such  transfer, 
to  the  extent  that  the  subsequent  transferee  fails  to 
meet  such  liability;  but  this  provision  shall  not  be  con- 
strued to  affect  in  any  way  any  recourse  which  such 
shareholders  might  otherwise  have  against  those  in  whose 
names  such  shares  are  registered  at  the  time  of  such 
failure. 

LOANS  ON  REAL  ESTATE. 

624.  Sec.  24. — Any  national  banking  association  not  jgff*  ^l'^-  ^^'. 
situated  in  a  central  reserve  city  may  make  loans  secured  p  'stat.  l.', 
by  improved  and  unencumbered  farm  land  situated  with-  Act  Sept.  7. 
in  its  Federal  reserve  district  or  within  a  radius  of  one  1,^,^754^^  ^^^' 
hundred  miles  of  the  place  in  which  such  bank  is  located, 
irrespective  of  district  lines,  and  may  also  make  loans  se- 
cured by  improved  and  unencumbered  real  estate  located 

within  one  hundred  miles  of  the  place  in  which  such 
bank  is  located,  irrespective  of  district  lines ;  but  no  loan 
made  upon  the  security  of  such  farm  land  shall  be  made 
for  a  longer  time  than  five  years,  and  no  loan  made  upon 
the  security  of  such  real  estate  as  distinguished  from 
farm  land  shall  be  made  for  a  longer  time  than  one  year 
nor  shall  the  amount  of  any  such  loan,  whether  upon  such 
farm  land  or  upon  such  real  estate,  exceed  fifty  per 
centum  of  the  actual  value  of  the  property  offered  as  se- 
curity. Any  such  bank  may  make  such  loans,  whether 
secured  by  such  farm  land  or  such  real  estate,  in  an  ag- 
gregate sum  equal  to  twenty-five  per  centum  of  its  capital 
and  surplus  or  to  one-third  of  its  time  deposits  and  such 
banks  may  continue  hereafter  as  heretofore  to  receive 
time  deposits  and  to  pay  interest  on  the  same. 

The  Federal  Reserve  Board  shall  have  power  from 
time  to  time  to  add  to  the  list  of  cities  in  which  national 
banks  shall  not  be  permitted  to  make  loans  secured  upon 
real  estate  in  the  manner  described  in  this  section. 

FOREIGN  BRANCHES. 

625.  Sec.  25  [as  amended  1919]. — Any  national  banking  Act  Dec.  23, 
association  possessing  a  capital  and  surplus  of  $1,000,000  ss  st^at*!"  "l.! 
or  more  may  file  application  with  the  Federal  Reserve  ^^^• 
Board  for  permission  to  exercise,  upon  such  conditions  ^ct.  Sept.  7, 
and  under  such  regulations  as  may  be  prescribed  by  the  Jf  ^SwJ^^  ^***' 
said  board,  either  or  both  of  the  following  powers : 

First.  To  establish  branches  in  foreign  countries  or     Act  Sept.  17. 
dependencies  or  insular  possessions  of  the  United  States  ^^^^" 
for  the    furtherance   of   the    foreign   commerce   of   the 
United  States,  and  to  act  if  required  to  do  so  as  fiscal 
agents  of  the  United  States. 

Second.  To  invest  an  amount  not  exceeding  in  the 
aggi"egate  ten  per  centum  of  its  paid-in  capital  stock  and 


166  THE  FEDERAL  RESERVE  ACT. 

surplus  in  the  stock  of  one  or  more  banks  or  corporations 
chartered  or  incorporated  under  the  laws  of  the  United 
States  or  of  any  State  thereof,  and  principally  engaged  in 
international  or  foreign  banking,  or  banking  in  a  depend- 
ency or  insular  possession  of  the  United  States  either 
directly  or  through  the  agency,  ownership,  or  control  of 
local  institutions  in  foreign  countries,  or  in  such  depend- 
encies or  insular  possessions.  Until  January  1,  1921,  any 
national  banking  association,  without  regard  to  the 
amount  of  its  capital  and  surplus,  may  file  application 
with  the  Federal  Reserve  Board  for  permission,  upon 
such  conditions  and  under  such  regulations  as  may  be  pre- 
scribed by  said  board,  to  invest  an  amount  not  exceeding 
in  the  aggregate  5  per  centum  of  its  paid-in  capital  and 
surplus  in  the  stock  of  one  or  more  corporations  chartered 
or  incorporated  under  the  laws  of  the  United  States  or  of 
any  State  thereof  and,  regardless  of  its  location,  princi- 
pally engaged  in  such  phases  of  international  or  foreign 
financial  operations  as  may  be  necessary  to  facilitate  the 
export  of  goods,  wares,  or  merchandise  from  the  United 
States  or  any  of  its  dependencies  or  insular  possessions 
to  any  foreign  country:  Provided^  however^  That  in  no 
event  shall  the  total  investments  authorized  by  this 
section  by  any  one  national  bank  exceed  10  per  centum 
of  its  capital  and  surplus. 

Such  application  shall  specify  the  name  and  capital  of 
the  bankmg  association  filing  it,  the  powers  applied  for, 
and  the  place  or  places  where  the  banking  or  financial 
operations  proposed  are  to  be  carried  on.  The  Federal 
Reserve  Board  shall  have  power  to  approve  or  to  reject 
such  application  in  whole  or  in  part  if  for  any  reason  the 
granting  of  such  application  is  deemed  inexpedient,  and 
shall  also  have  power  from  time  to  time  to  increase  or 
decrease  the  number  of  places  where  such  banking  opera- 
tions may  be  carried  on. 

Every  national  banking  association  operating  foreign 
branches  shall  be  required  to  furnish  information  con- 
cerning the  condition  of  such  branches  to  the  Comp- 
troller of  the  Currency  upon  demand,  and  every  member 
bank  investing  in  the  capital  stock  of  banks  or  corpora- 
tions described  above  shall  be  required  to  furnish  infor- 
mation concerning  the  condition  of  such  banks  or  cor- 
porations to  the  Federal  Reserve  Board  upon  demand, 
and  the  Federal  Reserve  Board  may  order  special  exami- 
nations of  the  said  branches,  banks,  or  corporations  at 
such  time  or  times  as  it  may  deem  best. 

Before  any  national  bank  shall  be  permitted  to  pur- 
chase stock  in  any  such  corporation  the  said  corporation 
shall  enter  into  an  agreement  or  undertaking  with  the 
Federal  Reserve  Board  to  restrict  its  operations  or  con- 
duct its  business  in  such  manner  or  under  such  limita- 
tions and  restrictions  as  the  said  board  may  prescribe  for 
the  place  or  places  wherein  such  business  is  to  be  con- 
ducted.   If  at  any  time  the  Federal  Reserve  Board  shall 


THE  FEDERAL  RESERVE  ACT.  167 

ascertain  that  the  regulations  prescribed  by  it  are  not 
being  complied  with,  said  board  is  hereby  authorized  and 
empowered  to  institute  an  investigation  of  the  matter  and 
to  send  for  persons  and  papers,  subpoena  witnesses,  and 
administer  oaths  in  order  to  satisfy  itself  as  to  the  actual 
nature  of  the  transactions  referred  to.  Should  such  in- 
vestigation result  in  establishing  the  failure  of  the  cor- 
poration in  question,  or  of  the  national  bank  or  banks 
which  may  be  stockholders  therein,  to  comply  with  the 
regulations  laid  down  by  the  said  Federal  Reserve  Board, 
such  national  banks  may  be  required  to  dispose  of  stock 
holdings  in  the  said  corporation  upon  reasonable  notice. 

Every  such  national  banking  association  shall  conduct 
the  accounts  of  each  foreign  branch  independently  of  the 
accounts  of  other  foreign  branches  established  by  it  and 
of  its  home  office,  and  shall  at  the  end  of  each  fiscal  period 
transfer  to  its  general  ledger  the  profit  or  loss  accrued 
at  each  branch  as  a  separate  item. 

Any  director  or  other  officer,  agent,  or  employee  of  any 
member  bank  may,  with  the  approval  of  the  Federal 
Reserve  Board,  be  a  director  or  other  officer,  agent,  or 
employee  of  any  such  bank  or  corporation  above  men- 
tioned in  the  capital  stock  of  which  such  member  bank 
shall  have  invested  as  hereinbefore  provided,  without 
being  subject  to  the  provisions  of  section  eight  of  the 
Act  approved  October  fifteenth,  nineteen  hundred  and 
fourteen,  entitled  "An  Act  to  supplement  existing  laws 
against  unlawful  restraints  and  monopolies,  and  for 
other  purposes." 

BANKING  CORPORATIONS  AUTHORIZED  TO  DO  FOREIGN 
BANKING  BUSINESS. 

625a.  Sec.  25  (a). — Corporations  to  be  organized  for  the ^^g^ct  Dec.  24. 
purpose  of  engaging  in  international  or  foreign  banking 
or  other  international  or  foreign  financial  operations,  or 
in  banking  or  other  financial  operations  in  a  dependency 
or  insular  possession  of  the  United  States,  either  di- 
rectly or  through  the  agency,  ownership,  or  control  of 
local  institutions  in  foreign  countries,  or  in  such  de- 
pendencies or  insular  possessions  as  provided  by  this  sec- 
tion, and  to  act  Avhen  required  by  the  Secretary  of  the 
Treasury  as  fiscal  agents  of  the  United  States,  laay  be 
formed  by  anj^  number  of  natural  persons,  not  less  in 
any  case  than  five. 

Such  persons  shall  enter  into  articles  of  association 
which  shall  specify  in  general  terms  the  objects  for 
which  the  association  is  formed  and  may  contain  any 
other  provisions  not  inconsistent  with  law  which  the 
association  may  see  fit  to  adopt  for  the  regulation  of  its 
business  and  the  conduct  of  its  affairs. 

Such  articles  of  association  shall  be  signed  by  all  of 
the  persons  intending  to  participate  in  the  organization 
of  the  corporation  and,  thereafter,  shall  be  forwarded  to 
the  Federal  Reserve  Board  and  shall  be  filed  and  pre- 
served in  its  office.    The  persons  signing  the  said  articles 


168  THE  FEDERAL  RESERVE  ACT. 

of  association  shall,  under  their  hands,  make  an  organi- 
zation certificate  which  shall  specifically  state: 

First.  The  name  assumed  by  such  corporation,  which 
shall  be  subject  to  the  approval  of  the  Federal  Reserve 
Board. 

Second.  The  place  or  places  where  its  operations  are 
to  be  carried  on. 

Third.  The  place  in  the  United  States  where  its  home 
office  is  to  be  located. 

Fourth.  The  amount  of  its  capital  stock  and  the  num- 
ber of  shares  into  which  the  same  shall  be  divided. 

Fifth.  The  names  and  places  of  business  or  residence  of 
the  persons  executing  the  certificate  and  the  number  of 
shares  to  which  each  has  subscribed. 

Sixth.  The  fact  that  the  certificate  is  made  to  enable 
the  persons  subscribing  tlie  same,  and  all  other  persons, 
firms,  companies,  and  corporations,  who  or  which  may 
thereafter  subscribe  to  or  purchase  shares  of  the  capital 
stock  of  such  corporation,  to  avail  themselves  of  the  ad- 
vantages of  this  section. 

The  persons  signing  the  organization  certificate  shall 
duly  acknowledge  the  execution  thereof  before  a  judge 
of  some  court  of  record  or  notary  public,  who  shall 
certify  thereto  under  the  seal  of  such  court  or  notary, 
and  thereafter  the  certificate  shall  be  forwarded  to  the 
Federal  Reserve  Board  to  be  filed  and  preserved  in  its 
office.  Upon  duly  making  and  filing  articles  of  asso- 
ciation and  an  organization  certificate,  and  after  the 
Federal  Reserve  Board  has  approved  the  same  and  issued 
a  permit  to  begin  business,  the  association  shall  become 
and  be  a  body  corporate,  and  as  such  and  in  the  name 
designated  therein  shall  have  power  to  adopt  and  use  a 
corporate  seal,  which  may  be  changed  at  the  pleasure 
of  its  board  of  directors;  to  have  succession  for  a  period 
of  twenty  years  unless  sooner  dissolved  by  the  act  of  the 
shareholders  owning  two-thirds  of  the  stock  or  by  an 
act  of  Congi'ess  or  unless  its  franchises  become  forfeited 
by  some  violation  of  law;  to  make  contracts;  to  sue  and 
be  sued,  complain,  and  defend  in  any  court  of  law  or 
equity ;  to  elect  or  appoint  directors,  all  of  whom  shall  be 
citizens  of  the  United  States ;  and,  by  its  board  of  direc- 
tors, to  appoint  such  officers  and  employees  as  may  be 
deemed  proper,  define  their  authority  and  duties,  require 
bonds  of  them,  and  fix  the  penaltj'  thereof,  dismiss  such 
officers  or  employees,  or  any  thereof,  at  pleasure  and  ap- 
point others  to  fill  their  places ;  to  prescribe,  by  its  board 
of  directors,  by-laws  not  inconsistent  with  law  or  with 
the  regulations  of  the  Federal  Reserve  Board  regulating 
the  manner  in  which  its  stock  shall  be  transferred,  its 
directors  elected  or  appointed,  its  officers  and  employees 
appointed,  its  property  transferred,  and  the  privileges 
gi-anted  to  it  by  law  exercised  and  enjoyed. 

Each  corporation  so  organized  shall  have  power,  under 
such  rules  and  regulations  as  the  Federal  Reserve  Board 
may  prescribe: 


THE   FEDERAL,  RESERVE   ACT.  169 

(a)  To  purchase,  sell,  discount,  and  negotiate,  with  or 
without  its  indorsement  or  guaranty,  notes,  drafts, 
checks,  bills  of  exchange,  acceptances,  including  bank- 
ers' acceptances,  cable  transfers,  and  othei*  evidences  of 
indebtedness;  to  purchase  and  sell,  with  or  without  its 
indorsement  or  guaranty,  securities,  including  the  obli- 
gations of  the  United  States  or  of  any  State  thereof  but 
not  including  shares  of  stock  in  any  corporation  except 
as  herein  provided ;  to  accept  bills  or  drafts  drawn  upon 
it  subject  to  such  limitations  and  restrictions  as  the  Fed- 
eral Reserve  Board  may  impose;  to  issue  letters  of 
credit;  to  purchase  and  sell  coin,  bullion,  and  exchange; 
to  borrow  and  to  lend  money ;  to  issue  debentures,  bonds, 
and  promissory  notes  under  such  general  conditions  as  to 
security  and  such  limitations  as  the  Federal  Reserve 
Board  ma}^  prescribe,  but  in  no  event  having  liabilities 
outstanding  thereon  at  any  one  time  exceeding  ten  times 
its  capital  stock  and  surplus;  to  receive  deposits  outside 
of  the  United  States  and  to  receive  only  such  deposits 
within  the  United  States  as  may  be  incidental  to  or  for 
the  purpose  of  carrying  out  transactions  in  foreign  coun- 
tries or  dependencies  or  insular  possessions  of  the  United 
States;  and  generally  to  exercise  such  powers  as  are  in- 
cidental to  the  poAvers  conferred  by  this  act  or  as  may 
be  usual,  in  the  determination  of  the  Federal  Reserve 
Board,  in  connection  with  the  transaction  of  the  business 
of  banking  or  other  financial  operations  in  the  countries, 
colonies,  dependencies,  or  possessions  in  which  it  shall 
transact  business  and  not  inconsistent  with  the  powers 
specifically  granted  herein.  Nothing  contained  in  this 
section  shall  be  construed  to  prohibit  the  Federal  Reserve 
Board,  under  its  power  to  prescribe  rules  and  regula- 
tions, from  limiting  the  aggregate  amount  of  liabilities 
of  any  or  all  classes  incurred  by  the  corporation  and 
outstanding  at  any  one  time.  Whenever  a  corporation 
organized  under  this  section  receives  deposits  in  the 
United  States  authorized  by  this  section  it  shall  carry 
reserves  in  such  amounts  as  the  Federal  Reserve  Board 
mav  prescribe,  but  in  no  event  less  than  10  per  centum 
of  its  deposits. 

(b)  To  establish  and  maintain  for  the  transaction  of 
its  business  branches  or  agencies  in  foreign  countries, 
their  dependencies  or  colonies,  and  in  the  dependencies 
or  insular  possessions  of  the  United  States,  at  such  places 
as  may  be  approved  by  the  Federal  Reserve  Board  and 
under  such  rules  and  regulations  as  it  may  prescribe,  in- 
cluding countries  or  dependencies  not  specified  in  the 
orimnal  organization  certificate. 

(c)  With  the  consent  of  the  Federal  Reserve  Board  to 
purcliase  and  hold  stock  or  other  certificates  of  owner- 
ship in  any  other  corporation  organized  under  the  pro- 
visions of  this  section,  or  under  the  laws  of  any  foreign 
country  or  a  colony  or  dependency  thereof,  or  under  the 
laws  of  any  State,  dependency,  or  insular  possession  of 
the  United  States  but  not  engaged  in  the  general  bushiess 


170  THE   FEDERAL  RESERVE   ACT. 

of  buying  or  selling  goods,  wares,  merchandise  or  com- 
modities in  the  United  States,  and  not  transacting  any 
business  in  the  United  States  except  such  as  in  the  judg- 
ment of  the  Federal  Reserve  Board  mav  be  incidental  to 
its  international  or  foreign  business :  Provided^  however^ 
That,  except  with  the  approval  of  the  Federal  Reserve 
Board,  no  corporation  organized  hei"eimder  shall  invest 
in  any  one  corporation  an  amount  in  excess  of  10  per 
centum  of  its  own  capital  and  surplus,  except  in  a  cor- 
poration engaged  in  the  business  of  bankmg,  when  15 
per  centum  of  its  capital  and  surplus  may  be  so  invested : 
Pro'vided  further^  That  no  corporation  organized  here- 
under shall  purchase,  own,  or  hold  stock  or  certificates 
of  ownership  in  any  other  corporation  organized  here- 
under or  under  the  laws  of  an}'^  State  which  is  in  sub- 
stantial competition  therewith,  or  which  holds  stock  or 
certificates  of  ownership  in  corporations  which  are  in 
substantial  competition  with  the  purchasing  corporation. 

Nothing  contained  herein  shall  prevent  corporations 
organized  hereunder  from  purchasing  and  holding  stock 
in  any  corporation  where  such  purchase  shall  be  neces- 
sary to  prevent  a  loss  upon  a  debt  previously  contracted 
in  good  faith;  and  stock  so  purchased  or  acquired  in 
corporations  organized  under  this  section  shall  within 
six  months  from  such  purchase  be  sold  or  disposed  of  at 
public  or  private  sale  unless  the  time  to  so  dispose  of 
same  is  extended  by  the  Federal  Reserve  Board. 

No  corporation  organized  under  this  section  shall  carry 
on  any  part  of  its  business  in  the  United  States  except 
such  as,  in  the  judgment  of  the  Federal  Reserve  Board, 
shall  be  incidental  to  its  international  or  foreign  busi- 
ness :  And  provided  further^  That  except  such  as  is  inci- 
dental and  preliminary  to  its  organization  no  such  cor- 
poration shall  exercise  any  of  the  powers  conferred  by 
this  section  until  it  has  been  duly  authorized  by  the 
Federal  Reserve  Board  to  commence  business  as  a  cor- 
poration organized  under  the  provisions  of  this  section. 

No  corporation  organized  under  this  section  shall 
engage  in  commerce  or  trade  in  commodities  except  as 
specifically  provided  in  this  section,  nor  shall  it  either 
directly  or  indirectly  control  or  fix  or  attempt  to  control 
or  fix  the  price  of  any  such  commodities.  The  charter  of 
any  corporation  violating  this  provision  shall  be  sub- 
ject to  forfeiture  in  the  manner  hereinafter  provided 
in  this  section.  It  shall  be  unlawful  for  any  director, 
officer,  agent,  or  employee  of  any  such  corporation  to  use 
or  to  conspire  to  use  the  credit,  the  funds,  or  the  power  of 
the  corporation  to  fix  or  control  the  price  of  any  such 
commodities,  and  any  such  person  violating  this  provi- 
sion shall  be  liable  to  a  fine  of  not  less  than  $1,000  and 
not  exceeding  $5,000  or  imprisonment  not  less  than  one 
year  and  not  exceeding  five  years,  or  both,  in  the  discre- 
tion of  the  court. 

No  corporation  shall  be  organized  under  the  provisions 
of  this  section  with  a  capital  stock  of  less  than  $2,000,000. 


THE  FEDERAL  RESERVE  ACT.  171 

one-quarter  of  which  must  be  paid  in  before  the  corpora- 
tion may  be  authorized  to  begin  business,  and  the  re- 
mainder of  the  capital  stock  of  such  corporation  shall 
be  paid  in  installments  of  at  least  10  per  centum  on  the 
whole  amount  to  which  the  corporation  shall  be  limited 
as  frequently  as  one  installment  at  the  end  of  each  suc- 
ceeding two  months  from  the  time  of  the  commencement 
of  its  business  operations  until  the  whole  of  the  capital 
stock  shall  be  paid  in.  The  capital  stock  of  any  such 
corporation  may  be  increased  at  any  time,  with  the  ap- 
proval of  the  Federal  Reserve  Board,  by  a  vote  of  two- 
thirds  of  its  shareholders  or  b}^  unanimous  consent  in 
writing  of  the  shareholders  without  a  meeting  and  with- 
out a  formal  vote,  but  any  such  increase  of  capital  shall 
be  fully  paid  in  within  ninety  days  after  such  approval ; 
and  may  be  reduced  in  like  manner,  provided  that  in  no 
event  shall  it  be  less  than  $2,000,000.  No  corporation, 
except  as  herein  provided,  shall  during  the  time  it  shall 
continue  its  operations  withdraw  or  permit  to  be  with- 
drawn, either  in  the  form  of  dividends  or  otherwise, 
any  portion  of  its  capital.  Any  national  banking  asso- 
ciation may  invest  in  the  stocK  of  any  corporation  or- 
ganized under  the  provisions  of  this  section,  but  the  ag- 
gi'egate  amount  of  stock  held  in  all  corporations  engaged 
in  business  of  the  kind  described  in  this  section  and  in 
section  25  of  the  Federal  Reserve  Act  as  amended  shall 
not  exceed  10  per  centum  of  the  subscribing  bank's  capi- 
tal and  surplus. 

A  majority  of  the  shares  of  the  capital  stock  of  any 
such  corporation  shall  at  all  times  be  held  and  owned  by 
citizens  of  the  United  States,  by  corporations  the  con- 
trolling interest  in  which  is  owned  by  citizens  of  the 
United  States,  chartered  under  the  laws  of  the  United 
States  or  of  a  State  of  the  United  States,  or  by  firms  or 
companies,  the  controlling  interest  in  which  is  owned  by 
citizens  of  the  United  States.  The  provisions  of  section 
8  of  the  act  approved  October  15,  1914,  entitled  'An  act 
to  supplement  existing  laws  against  unlawful  restraints 
and  monopolies,  and  for  other  purposes,'  as  amended  by 
the  acts  of  May  15,  1916,  and  September  T,  1916,  shall  be 
construed  to  apply  to  the  directors,  other  officers,  agents, 
or  employees  of  corporations  organized  under  the  pro- 
visions of  this  section:  Provided^  however^  That  nothing 
herein  contained  shall  (1)  prohibit  any  director  or  other 
officer,  ageiit  or  employee  of  any  member  bank,  who  has 
procured  the  approval  of  the  Federal  Reserve  Board 
from  serving  at  the  same  time  as  a  director  or  other  offi- 
cer, agent  or  employee  of  any  corporation  organized 
under  the  provisions  of  this  section  in  whose  capital 
stock  such  member  bank  shall  have  invested:  or  (2)  pro- 
hibit any  director  or  other  officer,  agent,  or  employee  of 
any  corporation  organized  under  the  provisions  of  this 
section,  who  has  procured  the  approval  of  the  Federal 
Reserve  Board,  fi'om  serving  at  the  same  time  as  a  direc- 
tor or  other  officer,  agent  or  employee  of  any  other  cor- 


172  THE  FEDERAL  RESERVE  ACT. 

poration  in  whose  capital  stock  such  first-mentioned  cor- 
poration shall  have  invested  under  the  provisions  of  this 
section. 

Xo  member  of  the  Federal  Reserve  Board  shall  be  an 
officer  or  director  of  any  corporation  organized  under 
the  provisions  of  this  section,  or  of  any  corporation  en- 
gaged in  similar  business  organized  under  the  laws  of 
any  State,  nor  hold  stock  in  any  such  corporation,  and 
before  entering  upon  his  duties  as  a  member  of  the  Fed- 
eral Reserve  Board  he  shall  certify  under  oath  to  the 
Secretary  of  the  Treasury  that  he  has  complied  with 
this  requirement. 

Shareholders  in  any  corporation  organized  under  the 
provisions  of  this  section  shall  be  liable  for  the  amount 
of  their  unpaid  stock  subscriptions.  Xo  such  corporation 
shall  become  a  member  of  any  Federal  reserve  bank. 

Should  any  corporation  organized  hereunder  violate  or 
fail  to  comply  with  any  of  the  provisions  of  this  section, 
all  of  its  rights,  privileges,  and  franchises  derived  here- 
from may  thereby  be  forfeited.  Before  any  such  cor- 
poration shall  be  declared  dissolved,  or  its  rights,  privi- 
leges, and  franchises  forfeited,  any  noncompliance  with, 
or  violation  of  such  laws  shall,  however,  be  determined 
and  adjudged  by  a  court  of  the  United  States  of  com- 
petent jurisdiction,  in  a  suit  brought  for  that  purpose  in 
the  district  or  territory  in  which  the  home  office  of  such 
corporation  is  located,  which  suit  shall  be  brought  by  the 
United  States  at  the  instance  of  the  Federal  Reserve 
Board  or  the  Attorney  General.  Upon  adjudication  of 
such  noncompliance  or  violation,  each  director  and  offi- 
cer who  participated  in,  or  assented  to,  the  illegal  act  or 
acts,  shall  be  liable  in  his  personal  or  individual  capacity 
for  all  damages  which  the  said  corporation  shall  have 
sustained  in  consequence  thereof.  Xo  dissolution  shall 
take  away  or  impair  any  remedy  against  the  corporation, 
its  stockholders,  or  officers  for  any  liability  or  penalty 
previously  incurred. 

Any  such  corporation  may  go  into  voluntary  liquida- 
tion and  be  closed  by  a  vote  of  its  shareholders  owning 
two-thirds  of  its  stock. 

Whenever  the  Federal  Reserve  Board  shall  become 
satisfied  of  the  insolvency  of  any  such  corporation,  it 
may  appoint  a  receiver  who  shall  take  possession  of  all 
of  the  property  and  assets  of  the  corporation  and  exer- 
cise the  same  rights,  privileges,  powers,  and  authority 
with  respect  thereto  as  are  now  exercised  by  receivers  of 
national  banks  appointed  by  the  Comptroller  of  the 
Currency  of  the  United  States:  Provided^  however^  That 
the  assets  of  the  corporation  subject  to  the  laws  of  other 
countries  or  jurisdictions  shall  be  dealt  with  in  accord- 
ance with  the  terms  of  such  laws. 

Evei'y  corporation  organized  under  the  provisions  of 
this  section  shall  hold  a  meeting  of  its  stockholders  an- 
nually upon  a  date  fixed  in  its  by-laws,  such  meeting  to 
be  held  at  its  home  office  in  the  United  States.     Every 


THE  FEDERAL  RESERVE  ACT.  173 

such  corporation  shall  keep  at  its  home  office  books  con- 
taining the  names  of  all  stockholders  thereof,  and  the 
names  and  addresses  of  the  members  of  its  board  of  di- 
rectors, together  with  copies  of  all  reports  made  by  it  to 
the  Federal  Reserve  Board.  Every  such  corporation 
shall  make  reports  to  the  Federal  Reserve  Board  at  such 
times  and  in  such  form  as  it  may  require;  and  shall  be 
subject  to  examination  once  a  year  and  at  such  other 
times  as  may  be  deemed  necessary  by  the  Federal  Reserve 
Board  by  examiners  appointed  by  the  Federal  Reserve 
Board,  the  cost  of  such  examinations,  including  the  com- 
pensation of  the  examiners,  to  be  fixed  by  the  Federal 
Reserve  Board  and  to  be  paid  by  the  corporation 
examined. 

The  directors  of  any  corporation  organized  under  the 
provisions  of  this  section  may,  semiannually,  declare  a 
dividend  of  so  much  of  the  net  profits  of  the  corporation 
as  they  shall  judge  expedient;  but  each  corporation  shall, 
before  the  declaration  of  a  dividend,  carry  one-tenth  of 
its  net  profits  of  the  preceding  half  year  to  its  surplus 
fund  until  the  same  shall  amount  to  20  per  centum  of  its 
capital  stock. 

Any  corporation  organized  under  the  provisions  of  this 
section  shall  be  subject  to  tax  by  the  State  within  which 
its  home  office  is  located  in  the  same  manner  and  to  the 
same  extent  as  other  corporations  organized  under  the 
laws  of  that  State  which  are  transacting  a  similar  char- 
acter of  business.  The  shares  of  stock  in  such  corpora- 
tion shall  also  be  subject  to  tax  as  the  personal  property 
of  the  owners  or  holders  thereof  in  the  same  manner  and 
to  the  same  extent  as  the  shares  of  stock  in  similar  State 
corporations. 

Any  corporation  organized  under  the  provisions  of 
this  section  may  at  any  time  within  the  two  years  next 
previous  to  the  date  of  the  expiration  of  its  corporate 
existence,  by  a  vote  of  the  shareholders  owning  two- 
thirds  of  its  stock,  apply  to  the  Federal  Reserve  Board 
for  its  approval  to  extend  the  period  of  its  corporate 
existence  for  a  term  of  not  more  than  twenty  years,  and 
upon  certified  approval  of  the  Federal  Reserve  Board 
such  corporation  shall  have  its  corporate  existence  for 
such  extended  period  unless  sooner  dissolved  by  the  act 
of  the  shareholders  owning  two-thirds  of  its  stock,  or  by 
an  Act  of  Congress  or  unless  its  franchise  becomes  for- 
feited by  some  violation  of  law. 

Any  bank  or  banking  institution,  principally  engaged 
in  foreign  business,  incorporated  by  special  law  of  any 
State  or  of  the  United  States  or  organized  under  the 
general  laws  of  any  State  or  of  the  United  States  and 
having  an  unimpaired  capital  sufficient  to  entitle  it  to 
become  a  corporation  under  the  provisions  of  this  sec- 
tion may,  by  the  vote  of  the  shareholders  owning  not  less 
than  two-thirds  of  the  capital  stock  of  such  bank  or 
banking  association,  with  the  approval  of  the  Federal 
Reserve  Board,  be  converted  into  a  Federal  corporation 


174  THE  FEDERAL  RESERVE  ACT. 

of  the  kind  authorized  by  this  section  with  any  name 
approved  by  the  Federal  Resei've  Board :  Provided^  how- 
ever^ That  said  conversion  shall  not  be  in  contravention 
of  the  State  law.  In  such  case  the  articles  of  association 
and  organization  certificate  may  be  executed  by  a  ma- 
jority of  the  directors  of  the  bank  or  banking  institution, 
and  the  certificate  shall  declare  that  the  owners  of  at 
least  two-thirds  of  the  capital  stock  have  authorized  the 
directors  to  make  such  certificate  and  to  change  or  con- 
vert the  bank  or  banking  institution  into  a  Federal  cor- 
poration. A  majority  of  the  directors,  after  executing 
the  articles  of  association  and  the  organization  certifi- 
cate, shall  have  power  to  execute  all  other  papers  and  to 
do  whatever  may  be  required  to  make  its  organization 
perfect  and  complete  as  a  Federal  corporation.  The 
shares  of  any  such  corporation  may  continue  to  be  for 
the  same  amount  each  as  they  were  before  the  conver- 
sion, and  the  directors  may  continue  to  be  directors  of 
the  corporation  until  others  are  elected  or  appointed  in 
accordance  with  the  provisions  of  this  section.  When 
the  Federal  Reserve  Board  has  given  to  such  corpora- 
tion a  certificate  that  the  provisions  of  this  section  have 
been  complied  with,  such  corporation  and  all  its  stock- 
holders, officers,  and  employees,  shall  have  the  same  pow- 
ers and  privileges,  and  shall  be  subject  to  the  same  duties, 
liabilities,  and  regulations,  in  all  respects,  as  shall  have 
been  prescribed  by  this  section  for  corporations  origi- 
nally organized  hereunder. 

Every  officer,  director,  clerk,  employee,  or  agent  of  any 
corporation  organized  under  this  section  who  embezzles, 
abstracts,  or  willfully  misapplies  any  of  the  moneys, 
funds,  credits,  securities,  evidences  of  indebtedness  or 
assets  of  any  character  of  such  corporation;  or  who, 
without  authority  from  the  directors,  issues  or  puts  forth 
any  certificate  of  deposit,  draws  any  order  or  bill  of 
exchange,  makes  any  acceptance,  assigns  any  note,  bond, 
debenture,  draft,  bill  of  exchange,  mortgage,  judgment, 
or  decree ;  or  who  makes  any  false  entry  in  any  book,  re- 
port, or  statement  of  such  corporation  with  intent,  in 
either  case,  to  injure  or  defraud  such  corporation  or  any 
other  company,  body  politic  or  corporate,  or  any  indi- 
vidual person,  or  to  deceive  any  officer  of  such  corpora- 
tion, the  Federal  Reserve  Board,  or  any  agent  or  ex- 
aminer appointed  to  examine  the  affairs  of  any  such 
corporation;  and  every  receiver  of  any  such  corporation 
and  every  clerk  or  employee  of  such  receiver  who  shall 
embezzle,  abstract,  or  willfully  misapply  or  wrongfully 
convert  to  his  own  use  any  moneys,  funds,  credits,  or 
assets  of  any  character  which  may  come  into  his  posses- 
sion or  under  his  control  in  the  execution  of  his  trust  or 
the  performance  of  the  duties  of  his  employment;  and 
every  such  receiver  or  clerk  or  employee  of  such  receiver 
who  shall,  with  intent  to  injure  or  defraud  any  person, 
body  politic  or  corporate,  or  to  deceive  or  mislead  the 
,  Federal  Reserve  Board,  or  any  agent  or  examiner  ap- 


THE  FEDERAL  RESERVE  ACT.  175 

pointed  to  examine  the  affairs  of  such  receiver,  shall 
make  any  false  entry  in  any  book,  report,  or  record  of 
any  mati:er  connected  with  the  duties  of  such  receiver; 
and  every  person  who  with  like  intent  aids  or  abets  any 
officer,  director,  clerk,  employee,  or  agent  of  any  corpora- 
tion organized  under  this  section,  or  receiver  or  clerk  or 
employee  of  such  receiver  as  aforesaid  in  any  violation 
of  this  section,  shall  upon  conviction  thereof  be  impris- 
oned for  not  less  than  two  years  nor  more  than  ten  years, 
and  may  also  be  fined  not  more  than  $5,000,  in  the  dis- 
cretion of  the  court. 

Whoever  being  connected  in  any  capacity  with  any 
corporation  organized  under  this  section  represents  in 
any  way  that  the  United  States  is  liable  for  the  payment 
of  any  bond  or  other  obligation,  or  the  interest  thereon, 
issued  or  incurred  by  any  corporation  organized  here- 
under, or  that  the  United  States  incurs  any  liability  in 
respect  of  any  act  or  omission  of  the  corporation,  shall 
be  punished  by  a  fine  of  not  more  than  $10,000  and  by  im- 
prisonment for  not  more  than  five  years. 

REPEAL  OF  PROVISIONS  OF  LAW  INCONSISTENT  WITH 
THE  PROVISIONS  OF  THE  FEDERAL  RESERVE  ACT. 

626.  Sec.  26. — All  provisions  of  law  inconsistent  with    Act  Dec.  2S, 
or  superseded  by  any  of  the  provisions  of  this  Act  are  to  38    'stat   ^u, 
that  extent  and  to  that  extent  only  hereby  repealed :  ^'^^* 
Provided,  Nothing  in  this  Act  contained  shall  be  con- 
strued to  repeal  the  parity  provision  or  provisions  con- 
tained in  an  Act  approved  March  fourteenth,  nineteen 
hundred,  entitled  "An  Act  to  define  and  fix  the  standard 

of  value,  to  maintain  the  parity  of  all  forms  of  money 
issued  or  coined  by  the  United  States,  to  refund  the  public 
debt,  and  for  other  purposes,"  and  the  Secretary  of  the 
Treasury  may,  for  the  purpose  of  maintaining  such  parity 
and  to  strengthen  the  gold  reserve,  borrow  gold  on  the 
security  of  United  States  bonds  authorized  by  section  two 
of  the  Act  last  referred  to  or  for  one-year  gold  notes 
bearing  interest  at  a  rate  of  not  to  exceed  three  per 
centum  per  annum,  or  sell  the  same  if  necessary  to  obtain 

fold.    When  the  funds  of  the  Treasury  on  hand  justify, 
e  may  purchase  and  retire  such  outstanding  bonds  and 
notes. 

ACT  OF  MAY  30,  1908,  EXTENDED  TO  JUNE  30,  1915. 
REENACTMENT  OF  CERTAIN  SECTIONS  OF  REVISED 
STATUTES. 

627.  Sec.  27.— The  provisions  of  the  Act  of  May  thir-  ^^Act  Dec.  |^3. 
tieth,  nineteen  hundred  and  eight,  authorizing  national  88    'stat.'    l.', 
currency  associations,  the  issue  of  additional  national-  ^^ict  auk.  4, 
bank  circulation,  and  creating  a  National  Monetary  Com-  jf^l^g^^ 
mission,  which  expires  by  limitation  under  the  terms  of    ' 

such  Act  on  the  thirtieth  day  of  June,  nineteen  hundred 
and  fourteen,  are  hereby  extended  to  June  thirtieth,  nine- 
teen hundred  and  fifteen,  and  sections  fifty-one  hundred 


176  THE  FEDERAL  RESERVE  ACT. 

and  fifty-three,  fifty-one  hundred  and  seventy-two,  fifty- 
one  hundred  and  ninety-one,  and  fifty-two  hundred  and 
fourteen  of  the  Eevised  Statutes  of  the  United  States, 
which  were  amended  by  the  Act  of  May  thirtieth,  nine- 
teen hundred  and  eight,  are  hereby  reenacted  to  read  as 
such  sections  read  prior  to  May  thirtieth,  nineteen  hun- 
dred and  eight,  subject  to  such  amendments  or  modifica- 
tions as  are  prescribed  in  this  Act : 

KATE  OF  TAXATION  ON  CIRCULATING  NOTES  SECURED 
OTHERWISE  THAN  BY  BONDS  OF  THE  UNITED  STATES. 
WHEN  SECRETARY  OF  TREASURY  AUTHORIZED  TO 
SUSPEND  LIMITATIONS  OF  ACT  OF  MAY  SO,  1908. 

1913*  £c?' 2i\     627a.  Provided,  hoivever.  That  section  nine  of  the  Act 
38     Stat.'    L.'  first  referred  to  in  this  section  is  hereby  amended  so  as  to 
Act  Aug.  4,  change  the  tax  rates  fixed  in  said  Act  by  making  the  por- 
if  ^e^sf ^  ^*^^'  tio^  applicable  thereto  read  as  follows : 

National  banking  associations  having  circulating  notes 
secured  otherwise  than  by  bonds  of  the  United  states, 
shall  pay  for  the  first  three  months  a  tax  at  the  rate  oi 
three  per  centum  per  annum  upon  the  average  amount 
of  such  of  their  notes  in  circulation  as  are  based  upon 
the  deposit  of  such  securities,  and  afterwards  an  addi- 
tional tax  rate  of  one-half  of  one  per  centum  per  annum 
for  each  month  until  a  tax  of  six  per  centum  per  annum 
is  reached,  and  thereafter  such  tax  of  six  per  centum 
per  annum  upon  the  average  amount  of  such  notes :  Pro- 
vided  further,  That  whenever  in  his  judgment  he  iflay 
deem  it  desirable,  the  Secretary  of  the  Treasury  shall 
have  power  to  suspend  the  limitations  imposed  by  sec- 
tion one  and  section  three  of  the  Act  referred  to  in  this 
section,  which  prescribe  that  such  additional  circulation 
secured  otherwise  than^by  bonds  of  the  United  States 
shall  be  issued  only  to  National  banks  having  circulating 
notes  outstanding  secured  by  the  deposit  of  bonds  of  the 
United  States  to  an  amount  not  less  than  forty  per 
centum  of  the  capital  stock  of  such  banks,  and  to  suspend 
also  the  conditions  and  limitations  of  section  five  of  said 
Act  except  that  no  bank  shall  be  permitted  to  issue  circu- 
lating notes  in  excess  of  one  hundred  and  twenty-five  per 
centum  of  its  unimpaired  capital  and  surplus.  He  shall 
require  each  bank  and  currency  association  to  maintain 
on  deposit  in  the  Treasury  of  the  United  States  a  sum  in 
gold  sufficient  in  his  judgment  for  the  redemption  of  such 
notes,  but  in  no  event  less  than  five  per  centum.  He  may 
permit  National  banks,  during  the  period  for  which 
such  provisions  are  suspended,  to  issue  additional  circula- 
tion under  the  terms  and  conditions  of  the  Act  referred 
to  as  herein  amended :  Provided  further,  That  the  Secre- 
tary of  the  Treasury,  in  his  discretion,  is  further  author- 
ized to  extend  the  benefits  of  this  Act  to  all  (jualified 
State  Imnks  and  trust  companies,  which  have  joined  the 
Federal  reserve  system,  or  which  may  contract  to  join 
within  fifteen  days  after  the  passage  of  this  Act, 


THE   FEDERAL   RESERVE   ACT.  177 

REDUCTION  OF  CAPITAL  OF  NATIONAL  BANKS. 

628.  Sec.  28.— Section  fifty-one  hundred  and  forty-three  j^.f  g^^*-  ^i: 
of  the  Revised  Statutes  is  hereby  amended  and  reenacted  38  sut."  u', 
to  read  as  follows:    Anj'  association  formed  under  this 

title  may,  by  the  vote  of  shareholders  owning  two-thirds 
of  its  capital  stock,  reduce  its  capital  to  any  sum  not  be- 
low the  amount  required  by  this  title  to  authorize  the 
formation  of  associations ;  but  no  such  reduction  shall  be 
allowable  which  will  reduce  the  capital  of  the  association 
below  the  amount  required  for  its  outstanding  circula- 
tion, nor  shall  any  reduction  be  made  until  the  amount 
of  the  proposed  reduction  has  been  reported  to  the  Comp- 
troller of  the  Currency  and  such  reduction  has  been  ap- 
proved by  the  said  Comptroller  of  the  Currenc}'  and  by 
the  Federal  Reserve  Board,  or  by  the  organization  com- 
mittee pending  the  organization  of  the  Federal  Reserve 
Board. 

INYALIDATION  OF  CLAUSE,  ETC.,  IN  ACT  NOT  TO  INVALL 
DATE  REMAINDER  OF  ACT. 

629.  Sec.  29. — If  anv  clause,  sentence,  paragraph,  or  Act  Dec.  23, 
part  of  this  Act  shall  for  any  reason  be  adjudged  by  any  38  'stat.*  \.', 
court  of  competent  jurisdiction  to  be  invalid,  such  judg-^^^* 

ment  shall  not  affect,  impair,  or  invalidate  the  remainder 
of  this  Act,  but  shall  be  confined  in  its  operation  to  the 
clause,  sentence,  paragraph,  or  part  thereof  directly  in- 
volved in  the  controversy  in  which  such  judgment  shall 
have  been  rendered. 

RESERTATION  OF  RIGHT  TO  AMEND  OR  REPEAL. 

Act   Dec.   23, 

630.  Sec.  30. — The  right  to  amend,  alter,  or  repeal  this  g^f  i^,  sec  30 : 
Act  is  hereby  expressly  reserved.  276. 

164312°— 20 12 


178 


THE   FEDERAL   RESERVE  ACT. 


ACTS  OF  GENERAL  NATURE. 


179 


CHAPTER  \^I. 


ACTS  OF  A  GENERAL  NATURE  AND  SECTIONS  OF  THE  REVISED  STATUTES, 
NOT  INCLUDED  IN  THE  NATIONAL  BANK  ACT,  AFFECTING  NATIONAL 
BANKS. 


700. 


District  attorney   to  conduct  suits 
when  United  States  is  a  party. 

Jurisdiction  of  district  court  to  en- 
join Comptroller. 

Where   such    proceedings   must   be 
brought. 

Sealed    certificates    of    Comptroller 
competent  evidence. 

Certified  copy  of  organization  cer- 
tificate as  evidence. 
705-715.  Tax  on  State  bank  circulation. 
716-717.  Tax  on  United  States  and  na- 
tional bank  notes. 


701. 
702. 
703. 
704. 


718.  Restrictions  on  notes  less  than  one 
dollar. 

719-729.  Legal  tender. 

730-738.  Government  depositaries. 

739-748.  Offenses  against  the  currency. 

749-762.  Currency  act  March  14,  1900. 

763-766.  Act  March  4,  1907. 

767-768.  Panama  Canal  bonds. 

769-770.  Certified  checks  when  receiva- 
ble for  duties  and  taxes. 

771.  Subscriptions  to  Red  Cross. 


ALL  SUITS  UNDER  BANKING  LAW  IN  WHICH  THE  UNITED 
STATES  OR  ANY  OF  ITS  OFFICERS  OR  AGENTS  ARE 
PARTIES  TO  BE  CONDUCTED  BY  DISTRICT  ATTOR- 
NEYS UDER  THE  SUPERVISION  OF  THE  SOLICITOR 
OF  THE  TREASURY. 


Act    Feb.    25, 


700.  Sec.  380. — All  suits  and  proceedings  arising  out  ,„.,  „  ,„  _„  „. 

..  ,,  .^  .  iTi-  l»o3,  c.  58,  sec.55; 

of  the  provisions  of  law  governing  national  banking  asso-  i2stat.  l.,68o. 
ciations,  in  which  the  United  States  or  any  of  its  officers  isoi^'c.ioe^s^eVsei 
or  agents  shall  be  parties,  shall  be  conducted  by  the  dis-  ^^  ^^^^-  ^•'  ^^°- 
trict  attorneys  of  the  several  districts  under  the  direction 
and  supervision  of  the  Solicitor  of  the  Treasury. 

Note. — The  United  States  Supreme  Court  decided  in  the  case  of 
Gibson  v.  Peters  (150  U.  S.,  342)  that  a  district  attorney  could  not 
receive  any  compensation  for  services  in  conducting  a  suit  arising 
out  of  the  provisions  of  the  national  banking  laws  in  which  the  United 
States  or  any  of  its  officers  or  agents  are  parties. 

JURISDICTION  OF  DISTRICT  COURT  TO  ENJOIN   COMP- 
TROLLER. 


701.  Sec.  24 
j  urisdiction  as  follows 


The  district  court  shall  have  original  jg^^['^|^-3^||'[|^ 

1092.  ' 
*  *  * 


Sixteenth,  Of  aU  cases  commenced  by  the  United 
States,  or  by  direction  of  any  officer  thereof,  against  any 
national  banking  association,  and  cases  for  winding  up 
the  affairs  of  any  sach  bank;  and  of  all  suits  brought  by 
any  banking  association  established  in  the  district  for 
which  the  court  is  held,  imder  the  provisions  of  title 
"National  Banks,"  Revised  Statutes,  to  enjoin  the 
Comptroller  of  the  Currency,  or  an}-  receiver  acting  under 
his  direction,  as  provided  ])y  said  title.  And  ail  national 
banking  associations  established  under  the  hiws  of  the 
United  States  shall,  for  tlie  purposes  of  all  other  actions 
by  or  against  them,  real,  personal,  or  mixed,  and  all  suits 


181 


282  ACTS  OF  GENERAL  NATURE. 

in  equity,  be  deemed  citizens  of  the  States  in  which  they 
are  respectively  located. 

Note. — Proceedings  to  enjoin  Comptroller  are  those  authorized  by 
Bectlon  5237,  United  States  Revised  Statutes.  Until  the  passage  of  the 
act  of  March  3,  1911,  the  circuit  courts  had  this  jurisdiction  under  sec- 
tion 629,  United  States  Revised  Statutes. 

WHERE  SUCH  PROCEEDINGS  MUST  BE  BROUGHT. 

.o-f*    ?;^®    ^'      702.  Sec.  736. — All  proceedinj^s  by  any  national  bank- 

1864,  c.  106,  sees.  .  .      .  ^  •        .1        F(  .      11  t    ±-u       rx. 

60. 57;  13 Stat.  L.,  mg  association  to  enjoin  the  Comptroller  oi  tne  (Jur- 
115, 116.  rency,  under  the  provisions  of  any  law  relating  to  national 

banking  associations,  shall  be  had  in  the  district  where 

such  association  is  located. 

SEALED  CERTIFICATES   OF  COMPTROLLER  COMPETENT 
EVIDENCE. 

1864*^0  io6°sec  2  '^^^'  ^^^'  ^^^' — ^Ivcry  Certificate,  assignment,  and  con- 
lastat.  L.!ioo;  '  veyance  executed  by  the  Comptroller  of  the  Currency,  in 
pursuance  of  law,  and  sealed  with  his  seal  of  office,  shall 
be  received  in  evidence  in  all  places  and  courts;  and  all 
copies  of  papers  in  his  office,  certified  by  him  and  authen- 
ticated by  the  said  seal,  shall  in  all  cases  be  evidence 
equally  with  the  originals.  An  impression  of  such  seal 
directly  on  the  paper  shall  be  as  valid  as  if  made  on  wax 
or  wafer. 

CERTIFIED   COPT    OF   ORGANIZATION   CERTIFICATE  AS 
EVIDENCE. 

isef  c  loe^sec  e-  '^^^'  ^^^'  ^^^' — Copies  of  the  organization  certificate  of 
13  Stat.  L.,' 101.'  '  any  national  banking  association,  duly  certified  by  the 
Comptroller  of  the  Currency,  and  authenticated  by  his 
seal  of  office,  shall  be  evidence  in  all  courts  and  places 
within  the  jurisdiction  of  the  United  States  of  the  exist- 
ence of  the  association,  and  of  every  matter  which  could 
be  proved  by  the  production  of  the  original  certificate. 

TAX    ON    STATE    BANK    CIRCULATION. 
TAX  ON  CIRCULATION. 
705.  Sec.  3408.— 

Note. — The  tax  on  circulation  waa  originally  provided  for  in  the  act 
of  June  30,  1864.  The  taxation  provisions  were  amended  by  section  6 
of  the  act  of  March  3,  1865,  by  section  9  of  the  act  of  July  13,  1866,  and 
by  the  act  of  June  6, 1872,  section  37.  The  provisions  as  thus  amended 
were  incorporated  in  the  Revised  Statutes  as  section  3408.  This  sec- 
tion included  three  subsections,  the  first  imposing  a  tax  on  deposits, 
the  second  on  capital,  and  the  third  on  circulation  of  banking  institu- 
tions. The  first  and  second  subsections  of  this  section  were  repealed 
by  the  act  of  March  3,  1883,  and  the  third  subsection  was  superseded  by 
the  act  of  February  8,  1875. 


CIRCULATION— WHEN  EXEMPTED  FROM  TAX. 

Act  Mar.3 1865       706.  Sbc.  3411. — Whenever  the  Outstanding  circulation 

c.  78,  sec.  14;  13      ,  ,         .  .      .  ^  .  ° 

Stat.  L.  486.       of  any  bank,  association,  corporation,  company,  or  person 

i866^c.  184! sec.^gj  is  rcduccd  to  an  amount  not  exceeding  five  per  centum  of 

14  sUi.  L.',  146.    ^}^Q  chartered  or  declared  capital  existing  at  the  time  the 

same  was  issued,  said  circulation  shall  be  free  from  taxa- 


ACTS  OF  GENERAL  NATURE.  183 

tion;  and  whenever  any  bank  which  has  ceased  to  issue 
notes  for  circulation  deposits  in  the  Treasury  of  the  United 
States,  in  lawful  money,  the  amount  of  its  outstanding 
circulation,  to  be  redeemed  at  par,  under  such  regulations 
as  the  Secretary  of  the  Treasury  shall  prescribe,  it  shall 
be  exempt  from  any  tax  upon  such  circulation. 

707.  Sees.  3412,  3413.— 

Superseded  by  act  February  8,  1875. 

TAX  ON  CIRCULATION— ACT  FEBRUARY  8,  1875. 

708.  Sec.  19.-— That    every    person,    firm,    association  ^  ^^^'^^-^j-g^^^ 
other  than  national  bank  associations,  and  everv  corpora-  stat.'i..,  3ii. ' 
tion,  State  bank,  or  State  banking  association,  sliall  pay  a 

tax  of  ten  per  centum  on  the  amount  of  their  own  notes 
ilsed  for  circulation  and  paid  out  by  them. 

TAX  ON  NOTES  OF  STATE  BANKS,  MUNICIPAL  CORPO- 
RATIONS, ETC.,  USED  AS  CIRCULATION  AND  PAID 
OUT  BY  BANKS.     ACT  FEBRUARY  8,  1875. 

709.  Sec.  20.— That  every  such  person,  firm,  associa-^.  "|^*^*^|J5f| 
tion,  corporation,  wState  bank,  or  State  banking  associa-  stat.'L.,  sii. ' 
tion,  and  also   every  national  banking  association,  shall 

pay  a  Hke  tax  of  ten  per  centum  on  the  amount  of  notes 
of  any  person,  firm,  association  other  than  a  national 
banking  association,  or  of  any  corporation,  State  bank,  or 
State  banking  association,  or  of  any  town,  city,  or  munici- 
pal corporation,  used  for  circulation  and  paid  out  by  them. 

BANKS'  RETURNS;  PAYMENT  OF  TAX  PENALTIES.  ACT 
FEBRUARY  8,  1875. 

710.  Sec.  21.— That  the  amount  of  such  circulating  ^^^^ctFeb^sa^s, 
notes,  and  of  the  tax  due  thereon,  shall  be  returned,  and  3u!  '  '  ' 
the  tax  paid  at  the  same  time,  and  in  the  same  manner, 

and  with  like  penalties  for  failure  to  return  and  pay  the 
same,  as  provided  by  law  for  the  return  and  payment  of 
taxes  on  deposits,  capital,  and  circulation,  imposed  by  the 
existing  provisions  of  internal-revenue  law. 


SEMIANNUAL  RETURN  BY  BANKS. 


30, 
sec. 


711.  Sec.  3414. — A  true  and  complete  return  of  the  jg^^^c  ^rfa*  :, 
monthly  amount  of  circulation,  [of  deposits,  and  of  capi-  iin;'i3'stat'.  Tj 
taJ],  as  aforesaid,  and  of  the  monthly  amount  of  notes  of  ^'aci   juIv   13, 
persons,    town,    city,    or   municipal   corporations.    State  }f|j^j  i|*'^j*^- ^' 
banks,  or  State  banking  associations  paid  out  as  aforesaid    Act  '  Mar.  as, 
for  the  previous  six  months,  shall  be  made  and  rendered  in  Ifstat.'  l.,T*  ^' 
duplicate  on  the  first  day  of  December  and  the  first  day  ^^^2^^,  ■'3"?* g^- 
of  June,  by  each  of  such  banks,  associations,  corporations,  37-  '17'stat.  l.) 
companies,  or  persons,  with  a  declaration  annexed  thereto,  ^Act   Dec    24, 
under  the  oath   of  such  person,  or  of  the  president  or  \f^i^{  f'  ^  ^'• 
cashier  of  such  bank,  association,  corporation,  or  com- 
pany, in  such  form  and  manner  as  may  be  ]>rescribed  by 
the  Commissioner  of  Internal  Kevenue,   that  the  same 
contains  a  true  and  faithful  statement  of  the  amounts 


184  ACTS   OF    GENERAL   NATURE. 

subject  to  tax,  as  aforesaid;  and  one  copy  shall  be  trans- 
mitted to  the  collector  of  the  district  in  which  any  such 
bank,  association,  corporation,  or  company  is  situated,  or 
in  which  such  person  has  his  place  of  business,  and  one 
copy  to  the  Commissioner  of  Internal  Revenue. 

Note. — Italicized  words  repealed  by  act  March  3,  1883.  "That  the 
taxes  herein  specified  imposed  by  the  law8  now  in  force  be,  and  the  same 
are  hereby,  repealed,  as  hereinafter  provided,  namely:  On  capital  and 
deposits  of  banks,  bankers,  and  national  banking  associations,  except 
such  taxes  as  are  now  due  and  payable." 

FAILURE  TO  MAKE  RETURN.     COMMISSIONER  TO  ESTI- 
MATE. 

,Jf^„  -^V?,®  3      712.  Sec.  3415. — In  default  of  the  returns  provided  in 

1864,   C.    173,   sec.      ^  ..  ..  e       •  ^        •  r  i  • 

110;  13  Stat.  L.,  the  preceding  section,  the  amount  oi  circulation,  [deposit, 
^^Act  July  13,  capital],  and  notes  of  persons,  towns,  city,  and  municipal 
}!®a;„^;  ^T^' ^^?"  ^'  corporations,  State  banks,  and  State  banking  associations 

14  Stat.  Jj.,  14t).  .x;  '  •    1        1       11    1  •  1    1  1         /^ 

Act  Dec.  21,  paid  out,  as  aforesaid,  shall  be  estimated  by  the  Commis- 
ifllat".  L.',?o2.^'  sioner  of  Internal  Revenue,  upon  the  best  information  he 
can  obtain.  And  for  any  refusal  or  neglect  to  make 
return  and  payment,  any  such  bank,  association,  corpora- 
tion, company,  or  person  so  in  default  shall  pay  a  penalty 
of  two  hundred  dollars,  besides  the  additional  penalty  and 
forfeitures  provided  in  other  cases. 

Note.— See  note  under  preceding  section. 

STATE    BANKS    CONVERTED    INTO    NATIONAL    BANKS; 
RETURNS,  HOW  MADE. 

c  "^s^^lc^'^ilMfa      '^^^'  ^®^-  3416.— Whenever  any  State  bank  or  banking 
stat.'L.,  486. '     associatiou  has  been  converted  into  a  national  banking 
iseefc.  184^860.^9;  association,   and  such  national  banking  association  has 
14  Stat.  L.,  146.    assumed  the  liabilities  of  such  State  bank  or  banking 
association,  including  the  redemption  of  its  bills,  by  any 
agreement  or  understanding  whatever  with  the  representa- 
tives of  such  State  bank  or  banking  association,  such 
national  banking  association  shall  be  held  to  make  the 
required  return  and  payment  on  the  circulation  outstand- 
ing, so  long  as  such  circulation  shall  exceed  five  per 
centum  of  the  capital  before  such  conversion  of  such  State 
bank  or  banking  association. 

TAX  PROVISIONS  RESTRICTED. 

m4\.'in  sec.  '^^^'  ^^'^-  ^^^'^  [^^  amended  1875].— The  provisions  of 
110;' 13  Stat.  L.' this  chapter  relating  to  the  tax  on  the  [deposits,  capital, 
^Act  July  13,  and]  circulation  of  banks  and  to  their  returns,  except  as 
l^isi&t^'  146'  contained  in  sections  thirty-four  hundred  and  ten,  thirty- 
'Act  F«b.''  is;  four  hundred  and  eleven,  thirty-four  hundred  and  twelve, 
L.,ii9.  "thirty-four  hundred  and  thirteen,  and  thirty-four  hun- 

dred and  sixteen,  and  such  parts  of  sections  thirty-four 
hundred  and  fourteen  and  thirty-four  hundred  and  fif- 
teen as  relate  to  the  tax  of  ten  per  centum  on  certain  notes, 
shall  not  apply  to  associations  which  are  taxed  under  and 
by  virtue  of  Title  "jNational  Banks." 

Note. — See  note  under  section  3414  stating  that  taxes  on  deposits 
and  capital  were  repealed  by  act  March  3,  1883. 


ACTS   OF   GENERAL   NATURE.  185 

TAXES  ON  INSOLVENT  BANKS.     ACT  MARCH  1,  1879. 

716.  Sec.  22.— That  whenever  and  after  any  bank  has  ^  A 25^^" '22^215 
ceased  to  do  business  by  reason  of  insolvency  or  bank- s'tat.L..  351. ' 
ruptcy,  no  tax  shall  be  assessed  or  collected,  or  paid  into 
the  Treasury  of  the  United  States,  on  account  of  such 
bank,  which  shall  diminish  the  assets  thereof  necessary 
for  the  fuU  payment  of  all  its  depositors;  and  such  tax 
shall  be  abated  from  such  national  banks  as  are  found  by 
the  Comptroller  of  the  Currency  to  be  insolvent;  and  the 
Commissioner  of  Internal  Revenue,  when  the  facts  shall 
so  appear  to  him,  is  authorized  to  remit  so  much  of  said 
tax  against  insolvent  State  and  savings  banks  as  shall  be 
found  to  affect  the  claims  of  their  depositors. 

Note. — Part  of  section  omitted  superseded  by  act  of  March  3,  1883. 

TAX  ON  UNITED  STATES   AND  NATIONAL  BANK    NOTES. 

OBLIGATIONS  OF  UNITED  STATES  EXEMPT  FROM  TAXA- 
TION. 

716.  Sec.  3701.— All  stocks,  bonds.  Treasury  notes,  and  jg^^^^  SVE; 
other  obligations  of  the  United  States,  shall  be  exempt  12  stat.  t.,  m 
from  taxation  by  or  under  State  or  municipal  or  local  ^'^^s^^^'  1^2 
authority.  f^^S^iKcVv! 

sec.  1;  13  Stat.  L.,  13.  Act  June  30, 1864,  c.  172,  sec.  1;  13  Stat.  L.,  218.  Act  Jan.  28,  1865, 
c.  22,  sec.  1;  13  Stat.  L.,  425.  Act  Mar.  3,  1865,  c.  77,  sec.  2;  13  Stat.  L.,  469.  Act  July  14, 
1870,  c.  256,  sec.  1;  16  Stat.  L.,  272. 

NATIONAL-BANK  NOTES  AND  NOTES  AND  CERTIFICATES 
OF  THE  UNITED  STATES  CIRCULATING  AS  CURRENCY 
SUBJECT  TO  STATE  TAXATION.     ACT  AUGUST  13, 1894. 

717.  Sec.  1. — That  circulating  notes  of  national  bank-  is^'^^s^^^i.  ^^ 
ing  associations  and  United  States  legal-tender  notes  and  stat.  l.,z78.' 
other  notes  and  certificates  of  the  United  States  payable 

on  demand  and  circulating  or  intended  to  circulate  as 
currency  and  gold,  silver  or  other  coin  shaU  be  subject 
to  taxation  as  money  on  hand  or  on  deposit  under  the 
laws  of  any  State  or  Territory:  Provided,  That  any  such 
taxation  shall  be  exercised  in  the  same  maimer  and  at  the 
same  rate  that  any  such  State  or  Territory  shall  tax  money 
or  currency  circulating  as  money  within  its  jurisdiction. 

Sec.  2.  That  the  provisions  of  this  act  shall  not  be  ,.-'^/*  ,„^"s.  is. 
deemed  or  held  to  change  existing  laws  in  respect  of  the  sut.  l.,  273. 
taxation  of  national  banking  associations. 

RESTRICTIONS    ON    NOTES    LESS   THAN   ONE   DOLLAR. 

718.  Sec.  3583.— 

Superseded  by  section  178,  act  March  4,  1909. 

Sec.  178.  No   person  shall  make,  issue,  circulate,  or  ^^^^^  I'S^^ec.": 
pay  out  any  note,  check,  memorandum,  token,  or  otlier  '^^'f^^^v'^igoa! 
obligation  for  a  less  sum  than  one  dollar,  intended  to  c.32i,s««^i5-8;  35 
circulate  as  money  or  to  be  received  or  used  in  lieu  of  S''»*-  ^■'  ^^^a- 
law^ul  money  of  the  United  States;  and  every  ])erson  so 
offending  shall  be  fined  not  more  than  five  hundred  dol- 
lars, or  imprisoned  not  more  than  six  months,  or  both. 

Note. — This  restriction  is  held  to  apply  only  to  checks  issued  for 
ike  purpose  of  circulating  as  money  and  not  to  checks  issued  in  the 
ordinary  course  of  business. 


186  ACTS  OF  GENERAL  NATUBE. 

LEGAL  TENDER. 
FOREIGN  COINS. 

18^7%.  Mfsec.^3;  "^19-  Sec.  3584.— No  foreign  gold  or  silver  coins  shall 
a  Stat,  l!,  163.  '  be  a  legal  tender  in  payment  of  debts. 

Note. — The  coinage  by  the  government  of  Philippine  Islands  of  the 
various  silver  and  minor  coins  for  use  in  the  islands  is  authorized  and 
the  legal-tender  quality  of  such  coins  as  well  as  of  the  gold  coins  of  the 
United  States  in  the  islands  is  prescribed  by  the  act  of  July  1,  1902, 
c.  1369,  sees.  76-83;  32  Stat.  L.,  710;  and  the  act  of  March  2,  1903,  c. 
980,  sec.  4;  32  Stat.  L.,  953. 

GOLD  COIN  OF  THE  UNITED  STATES. 

18^3!%. ^m,  s^:  ''20.  Sec.  3585.— The  gold  coins  of  the  United  States 
14;  17  Stat.  L.;  shall  be  a  legal  tender  in  all  payments  at  their  nominal 
*^  value  when  not  below  the  standard  weight  and  hmit  of 

tolerance  provided  by  law  for  the  single  piece,  and  when, 
reduced  in  weight  below  such  standard  and  tolerance, 
shall  be  a  legal  tender  at  valuation  in  proportion  to  their 
actual  weight. 

721.  Sec.  3586.— 

[Superseded  by  res.  July  22,  1876,  No.  17,  sec.  2;  act  Feb.  28,  1878, 
c.  20,  sec.  1;  act  June  9,  1879,  c.  12,  sec.  3.] 

AUTHORIZING  COINAGE  OF  STANDARD  SILVER  DOLLARS 
AND  MAKING  THEM  LEGAL  TENDER.  ACT  OF  FEB- 
RUARY 28,  1878. 

i878^c  M^sec.^;      '^^^'  ^^^-  ^- — "^^^^  there  shall  be  coined,  at  the  several 

20  Stat,  l'.,  25.  '  miuts  of  thc  United  States,  silver  dollars  of  the  weight  of 

412^  grains  Troy  of  standard  silver,  as  provided  in  the 
act  of  January  18,  1837,  on  which  shall  be  the  devices 
and  superscriptions  provided  by  said  act;  which  coins 
together  with  all  silver  dollars  heretofore  coined  by  the 
United  States,  of  Hke  weight  and  fineness,  shall  be  a 
legal  tender,  at  their  nominal  value,  for  all  debts  and 
dues  public  and  private,  except  where  otherwise  ex- 
pressly stipulated  in  the  contract. 

SUBSIDIARY  SILVER  COINS.     ACT  JUNE  9,  1879. 

18^9*^0.  i2Tec.  3-      '^^^-  ^60.  3.— That  the  present  silver  coins  of  the  United 

21  Stat.  L.',  8. '  'States  of  smaller  denominations  than  one  dollar  shall 

hereafter  be  a  legal  tender  in  aU  sums  not  exceeding  ten 
dollars  in  full  payment  of  all  dues  pubhc  and  private. 

MINOR  COINS. 

18^3^*0.^13^;  s^:  '^^^'  ^®°-  3587.— The  minor  coins  of  the  United  States 
16;  17  Stat.  L.,  shall  be  a  legal  tender,  at  their  nominal  value  for  any 
^^  amoimt  not  exceeding  twenty-five  cents  in  any  one  pay- 

ment. 


427. 


UNITED  STATES  NOTES. 

,Jfn  l^\..^'-  725.  Sec.  3588.— United  States  notes  shall  be  lawful 
12  Stat.  L.  345.  money,  and  a  legal  tender  m  payment  of  all  debts,  pubhc 
m^c.  142,  sec.\\  and  private,  within  the  United  States,  except  for  duties 
Res  j^  17' 1863'  ^^  iuiports  and  interest  on  the  pubhc  debt. 

No.  9, 12'stat.  h.',  823.    Act  Mar.  3,  1863,  c.  73,  sec.  3;  12  Stat.  L.,  711. 


ACTS    OF    GENERAL    NATURE.  187 

DEMAND  TREASTRT  NOTES. 

Act    July     17, 

726.  Sec.  3589. — Demand  Treasury  notes  authorized  by  \f^^^^^  \ ^^g' 
the  act  of  July  17,  1861,  chaptei'  5,  and  the  act  of  Febru-  Act  Feb.  12, 
ary  12,  1862,  chapter  20,  shall  be  lawful  money  and  asut^.'  \.f°'338. 
legal  tender  in  like  manner  as  United  States  notes.  *g^*  /f^.  ^I^* 

1;  12  Stat.  L.,  345.  Act  Mar.  17,  1862,  c.  45,  sec.  2;  12*  Stat.  L.,  37. 

INTEREST-BEARING  NOTES. 

727.  Sec.  3590. — Treasury  notes  issued  under  the  au- 
thority of  the  acts  of  March  3,  1863,  chapter  73,  and  June 
30,  1864,  chapter  172,  shall  be  legal  tender  to  the  same 

extent  as  United  States  notes,  for  their  face  value,  ex-  Act  Mar.  3. 
eluding  interest:  Provided,  That  Treasury  notes  issued  o^^ib*^st^at*^L!' 
imder  the  act  last  named  shall  not  be  a  legal  tender  in  "io.  '    '' 

payment  or  redemption  of  any  notes  issued  b}^  any  bank.  i864.  c"°^72; 
banking  association,  or  banker,  calculated  and  intended  ^^'ixh}^  ^^*' 
to  circulate  as  money. 

FOR  WHAT  DEMANDS  NATIONAL-BANK  NOTES  MAY  BE 
RECEIVED. 

728.  Sec.  5182.— 

Note. — See  section  5182,  national-bank  act,  paragraph  337,  ante. 

GOLD  CERTIFICATES.    ACT  JULY  12,  1882. 

Act   July   12, 

729.  Sec.  12.— That  the  Secretary  of  the  Treasury  is  i8|^^  sec.  ^i2_: 
authorized  and  directed  to  receive  deposits  of  gold  coin "  •  ••  • 
with  the  Treasurer  or  assistant  treasurers  of  the  United 

States,  in  sums  of  not  less  than  twenty  dollars,  and  to 
issue  certificates  therefor  in  denominations  of  not  less 
than  twenty  dollars  each,  corresponding  with  the  de- 
nominations of  United  States  notes.  The  coin  deposited 
for  or  representing  the  certificates  of  deposits  shall  be 
retained  in  the  Treasurj-  for  the  payment  of  the  same  on 
demand.  Said  certificates  shall  be  receivable  for  cus- 
toms, taxes,  and  all  public  dues,  and  when  so  received 
may  be  reissued;  and  such  certificates,  as  also  silver  cer- 
tificates, when  held  by  any  national  banking  association, 
shall  be  counted  as  part  of  its  lawful  reserve;  and  no 
national  banking  association  shall  be  a  member  of  any 
clearing  house  in  which  such  certificates  shall  not  be  re- 
ceivable in  the  settlement  of  clearing-house  balances: 
Provided,  That  the  Secretary  of  the  Treasury  shall  sus- 
pend the  issue  of  such  gold  certificates  whenever  the 
amount  of  gold  coin  and  gold  bullion  in  the  Treasury 
reserved  for  the  redemption  of  United  States  notes  falls 
below  one  hundred  millions  of  dollars;  and  the  provi- 
sions of  section  fifty-two  hundred  and  seven  of  the  Re- 
vised Statutes  shall  be  applicable  to  the  certificates  herein 
authorized  and  directed  to  be  issued. 

730.    Sec.    1.— That    gold    certificates    of    the    United  191V.*   ^"*^-   **• 
States  payable  to  bearer  on  demand  shall  be  and   are 
hereby  made  legal  tender  in  payment  of  all  debts  and 
dues,  public  and  private. 


188  ACTS  OF  GENERAL  NATURE. 

Sec.  2.  That  all  acts  or  parts  of  acts  which  are  incon- 
sistent with  this  act  are  hereby  repealed. 

Note. — See  section  6  of  the  currency  act  of  March  14,  1900,  as 
amended  March  4, 1907,  March  2, 1911,  and  June  12, 1916,  paragraph  754, 
post,  for  additional  provisions  relating  to  gold  certificates  and  making 
$10  lowest  denomination.  Gold  and  silver  certificates  are  not  legal 
tender,  but  are  receivable  for  all  public  dues. 

GOVERNMENT  DEPOSITARIES. 

DUTY  OF  DISBURSING  OFFICERS. 

Act  June  14,     730.  Sec.  3620  [as  amended  1877]. — It  shall  be  the  duty 
see.  i ;  14  Stat!  of  every  disbursing  officer  having  any  public  money  in- 
^"  Act'  Feb  27  trusted  to  him  for  disbursement,  to  deposit  the  same  with 
1877,    c     69*.  the  Treasurer  or  some  one  of  the  assistant  treasurers  of 
i!^'249.       ^  'the  United  States,  and  to  draw  for  the  same  only  as  it 
may  be  required  for  payments  to  be  made  by  him  in  pur- 
suance of  law;  and  draw  for  the  same  only  in  favor  of 
the  persons  to  whom  payment  is  made,  and  all  transfers 
from  the  Treasurer  of  the  United  States  to  a  disbursing 
officer  shall  be  by  draft  or  w^arrant  on  the  Treasury  or 
an  assistant  treasurer  of  the  United  States.     In  places, 
however,  where  there  is  no  Treasurer  or  assistant  treas- 
urer, the  Secretary  of  the  Treasury  may,  when  he  deems 
it  essential  to  the  public  interest,  specially  authorize  in 
writing  the  deposit  of  such  public  money  in  any  other 
public  depository,  or,  in  writing,  authorize  the  same  to  be 
kept  in  any  other  manner,  and  under  such  rules  and 
regulations  as  he  may  deem  most  safe  and  effectual  to 
facilitate  the  payments  to  public  creditors. 

Note.— See  also  act  March  2,  1907,  34  Stat.  L.,  1166,  author- 
izing Army  officers  to  keep  in  their  possession  restricted  amounts 
of  public  funds.  See  also  act  December  23,  1913,  section  15,  para- 
graph 734,  post. 

PROVISIONS  FOR  DEPOSIT  BY  CERTAIN  POSTMASTERS. 

Act  Mar.  3,     731.  Sec.    3847    fas   amended   19081. — Any   postmaster, 
17    'sta't.    L.".  having  public  money  belonging  to  the  Government,  at  an 
^^Act  May  27  office  withiu  a  city  or  town  where  there  is  no  Treasurer  or 
1908.   c.   206 ;  Assistant  Treasurer  of  the  United  States,  or  designated 
415.  ^*^*'     ^ '  depositary,  may  deposit  the  same  temporarily,  at  his  own 
risk  and  in  his  official  capacity,  in  any  national  or  State 
bank  in  the  State  in  which  the  said  postmaster  resides, 
or  in  which  his  office  is  located,  or  within  a  reasonable 
radius  of  his  post  office  in  an  adjacent  State,  but  no 
authority  or  permission  is  or  shall  be  given  for  the  pay- 
ment to  or  receipt  by  a  postmaster  or  any  other  person, 
of  interest,  directly  or  indirectly,  on  any  deposit  made 
as  herein  described. 

MISAPPROPRIATING  POSTAL  FUNDS  OR  PROPERTY; 
PUNISHMENT  FOR;  PRIMA  FACIE  EVIDENCE;  DEPOS- 
ITS, ETC.,  PERMITTED. 

732.  Sec.  4046.— (Originally  enacted  June  8,  1872.) 
Superseded  by  sec.  225,  act  of  March  4,  1909. 


ACTS  OF  GENERAL  NATURE.  189 

Sec.  225. — Whoever,  being  a  postmaster  or  other  per-  ^^^^^^  f^^-  *• 
son  employed  in  or  connected  with  any  branch  of  the  225;'35'8tat.  l.', 
postal  service,  shall  loan,  use,  pledge,  hypothecate,  or  ''^^' 
convert  to  his  own  use,  or  shall  deposit  in  any  bank,  or 
exchange  for  other  funds  or  property,  except  as  author- 
ized by  law,  any  money  or  property  coming  into  his  hands 
or  under  his  control  in  any  manner  whatever,  in  the  exe- 
cution or  under  color  of  his  office,  employment,  or  service, 
whether  the  same  shall  be  the  money  or  property  of  the 
United  States  or  not ;  or  shall  fail  or  refuse  to  remit  to  or 
deposit  in  the  Treasury  of  the  United  States  or  in  a  desig- 
nated depository,  or  to  account  for  or  turn  over  to  the 
proper  officer  or  agent,  any  such  money  or  property, 
when  required  so  to  do  by  law  or  the  regulations  of  the 
Post  Office  Department,  or  upon  demand  or  order  of  the 
Postmaster  General,  either  directly  or  through  a  duly 
authorized  officer  or  agent,  shall  be  deemed  guilty  of 
embezzlement;  and  every  such  person,  as  well  as  every 
other  person  advising  or  knowingly  participating  therein, 
shall  be  fined  in  a  sum  equal  to  the  amount  or  value  of  the 
money  or  property  embezzled,  or  imprisoned  not  more 
than  ten  years,  or  both.  Any  failure  to  produce  or  to  pay 
over  any  such  money  or  property,  when  required  so  to  do 
as  above  provided,  shall  be  taken  to  be  prima  facie  evi- 
dence of  such  embezzlement;  and  upon  the  trial  of  any 
indictment  against  any  person  for  such  embezzlement,  it 
shall  be  prima  facie  evidence  of  a  balance  against  him  to 
produce  a  transcript  from  the  account  books  of  the  Audi- 
tor for  the  Post  Office  Department.  But  nothing  herein 
shall  be  construed  to  prohibit  any  postmaster  depositing, 
xmdor  the  direction  of  the  Postmaster  General,  in  a  na- 
tional bank  designated  by  the  Secretary  of  the  Treasury 
for  that  purpose,  to  his  own  credit  as  postmaster,  any 
funds  in  his  charge,  nor  prevent  his  negotiating  drafts  or 
other  evidences  of  debt  through  such  bank,  or  through 
United  States  disbursing  officers,  or  otherwise,  when  in- 
structed or  required  so  to  do  by  the  Postmaster  General, 
for  the  purpose  of  remitting  surplus  funds  from  one  post 
office  to  another. 

NATIONAL  BANKING  ASSOCIATIONS   TO   BE  DEPOSITA- 
RIES OF  PUBLIC  MONEYS. 

733.  Sec.  5163  [as  amended  19071.— 
Note. — See  section  5153  under  "National-bank  act." 

GOVERNMENT  DEPOSITS. 

734.  Sec.  15.— The  moneys  held  in  the  general  fund  oi ^J^^^^^^fJ^ 
the  Treasury,  except  the  five  per  centum  fund  for  the  L.,'2ci.' 
redemption  of  outstanding  national-bank  notes  and  the 

funds  provided  in  this  Act  for  the  redemption  of  Federal 
reserve  notes  may,  upon, the  direction  of  the  Secretary  of 
the  Treasury,  be  deposited  in  Federal  reserve  banks,  which 
banks,  when  required  by  the  Secretary  of  the  Treasury, 
shaU  act  as  fiscal' agents  of  the  United  States;  and  the 
revenues  of  the  Government  or  any  part  thereof  may  be 


190  ACTS  OF  GENERAL  NATURE. 

deposited  in  such  banks,  and  disbursements  may  be  made 
by  checks  drawn  against  such  deposits. 

No  public  funds  of  the  Philippine  Islands,  or  of  the 
postal  savings,  or  any  Government  funds,  shall  be  de- 
posited in  the  continental  United  States  in  any  bank 
not  belonging  to  the  sj'stem  established  by  this  Act: 
Provided,  however,  That  nothing  in  this  Act  shall  be  con- 
strued to  deny  the  right  of  the  Secretary  of  the  Treasury 
to  use  member  banks  as  depositories. 

DEPOSIT  OF  PROCEEDS  ARISING  FROM  SALE  OF  BONDS, 
NO  RESERVE  REQUIRED  TO  BE  KEPT  AGAINST  UNITED 
STATES  DEPOSITS. 

wnfsec^r  ^'  ''3^-  .Sec.  7.— That  the  Secretary  of  the  Treasury,  in  hia 
discretion,  is  hereby  authorized  to  deposit  in  such  banks 
and  trust  companies  as  he  may  designate  the  proceeds,  or 
any  part  thereof,  arising  from  the  sale  of  the  bonds  and 
certificates  of  indebtedness  authorized  by  this  Act,  or  the 
bonds  previously  authorized  as  described  in  section  four 
of  this  Act,  and  such  deposits  may  bear  such  rate  of  in- 
terest and  be  subject  to  such  terms  and  conditions  as  the 
Secretary  of  the  Treasury  may  prescribe:  Provided,  That 
the  amount  so  deposited  shall  not  in  any  case  exceed 
the  amount  withdrawn  from  any  such  bank  or  trust  com- 
pany and  invested  in  such  bonds  or  certificates  of  indebt- 
edness plus  the  amount  so  invested  by  such  bank  or 
trust  company,  and  such  deposits  shall  be  secured  in  the 
manner  required  for  other  deposits  by  section  fifty-one 
hundred  and  fifty-three.  Revised  Statutes,  and  amend- 
ments thereto:  Provided  further,  That  the  provisions  of 
section  fifty-one  hundred  and  ninety-one  of  the  Revised 
Statutes,  as  amended  by  the  Federal  Reserve  Act  and  the 
amendments  thereof,  with  reference  to  the  reserves  re- 
quired to  be  kept  by  national  banking  associations  and 
other  member  banks  of  the  Federal  Reserve  System,  shall 
not  apply  to  deposits  of  public  moneys  by  the  United 
Statas  m  designated  depositaries. 

GOVERNMENT  DEPOSITS  IN  FEDERAL  LAND  BANKS. 

iQief  si;%  ^9  "^^e.  Sec.  6.— That  all  Federal  land  banks  and  joint  stock 
Stat.  L.,  365.'  land  banks  organized  under  this  Act,  when  designated  for 
that  purpose  by  the  Secretary  of  the  Treasury,  shall  be 
depositaries  of  pubhc  money,  except  receipts  from  cus- 
toms, under  such  regulations  as  may  be  prescribed  by 
said  Secretary;  and  they  may  also  be  employed  as  finan- 
cial agents  of  the  Government;  and  they  shall  perform 
all  such  reasonable  duties,  as  depositaries  of  public  money 
and  financial  agents  of  the  Government,  as  may  be  re- 
quired of  them.  And  the  Secretary  of  the  Treasury  shall 
require  of  the  Federal  land  banks  and  joint  stock  land 
banks  thus  dasignated  satisfactory  security,  by  the  deposit 
of  United  Statas  bonds  or  othertvise,  for  the  safekeeping 
and  prompt  payment  of  the  pubhc  money  deposited  with 
them,  and  for  the  faithful  performance-  of  their  duties  as 
financial  agents  of  the  Government.     No  Government 


ACTS  OF  GENERAL.  NATURE.  191 

funds  deposited  under  the  provisions  of  this  section  shall 
be  invested  in  mortgage  loans  or  farm  loan  bonds. 

PENALTY    FOR    UNAUTHORIZED    DEPOSIT    OF    PUBLIC 
MONEY. 

737.  Sec.  5488.— 

Originally  enacted  .Tune  14,  1SG6,  see  14  Stat.  L.  64.    Superseded 
by  sec.  87  of  the  act  of  Ma  rch  4,  1909. 

Sec.  87. — Whoever,  being  a  disbursing  ofl5cer  of  the  i^^^  ^^^  ^JJ' 
United  States,  or  a  person  acting  as  such,  shall  in  any  2;  i^  stat.  t.,  64. 
manner  convert  to  his  own  use,  or  loan  with  or  without  igogf  c.  ^2^,'  sec! 
interest,  or  deposit  in  any  place  or  in  any  manner,  except  f^^^  ^^^-  ^•» 
as  authorized  by  law,  any  pubhc  money  intrusted  to  him; 
or  shall,  for  any  purpose  not  prescribed  by  law,  withdraw 
from  the  Treasurer  or  any  assistant  treasurer,  or  any  au- 
thorized depositary,  or  transfer,  or  apply,  any  portion  of 
the  public  money  intrusted  to  him,  shall  be  deemed  guilty 
of  an  embezzlement  of  the  money  so  converted,  loaned, 
deposited,  withdrawn,  transferred,  or  applied,  and  shall  be 
fined  not  more  than  the  amount  embezzled,  or  imprisoned 
not  more  than  ten  years,  or  both. 

Note. — Sections  5489  to  5496  do  not  refer  to  national  banks. 

PENALTY    FOR    UNAUTHORIZED    RECEIPT    OR    USE    OP 
PUBLIC  MONEY. 

738.  Sec.  C497.— 

Originally  enacted  June  14,  1866  (14  Stat.  L.  65),  and  amended  by 
act  of  February  3,  1879  (20  Stat.  L.  280).  Superseded  by  sec.  96  of  the 
act  of  March  4,  1909. 

Sec.  96. — Every  banker,  broker,  or  other  person  not  an  ig^^*^  sec^'ge-  k 
authorized  depositary  of  pubUc  moneys,  who  shall  know-  stat'.  l.,  iioe.' 
ingly  receive  from  any  disbursing  officer,  or  collector  of 
internal  revenue,  or  other  agent  of  the  United  States,  any 
pubhc  money  on  deposit,  or  by  way  of  loan  or  accommo- 
dation, with  or  without  interest,  or  otherwise  than  in  pay- 
ment of  a  debt  against  the  United  States,  or  shall  use, 
transfer,  convert,  appropriate,  or  apply  any  portion  of  the 
pubhc  money  for  any  purpose  not  prescribea  by  law;  and 
every  president,  cashier,  teller,  director,  or  other  officer  of 
any  bank  or  banking  association  who  shall  violate  any 
provision  of  this  section  is  guilty  of  embezzlement  of  the 
pubhc  money  so  deposited,  loaned,  transferred,  used,  con- 
verted, appropriated,  or  apphed,  and  shall  be  fined  not 
more  than  the  amount  embezzled,  or  imprisoned  not  more 
than  ten  years,  or  both. 

Note. — For  duties  and  liabilities  of  depositaries  see  note  under  sec. 
5153,  paragraph  243,  ante. 

OFFENSES   AGAINST   THE    CURRENCY. 

OBLIGATION    OR    OTHER    SECURITY    OF    THE    UNITED 
STATES  DEFINED. 

739.  Sec.  147. — The  words  "obhgation  or  other  security  ,q4*^„  ^„^-    *> 

...  Ill     n  1-111  11  1  1  lyoa,  c.  321,  sec. 

of  the  United  States  shall  be  held  to  mean  all  bonds,  cor-  H7;  35  stat.  l., 
tificates  of  indebtedness,  national-bank  currency,  cou-  li^^^u^^l^s.*'*^ 
pons.  United  States  notes.  Treasury  notes,  gold  certifi-  pJ^J^l^  j^J  ^ 
cates,  silver  certificates,  fractional  notes,  certificates  of  i864. 


192  ACTS  OF  GENERAL  NATURE. 

deposit,  bills,  checks,  or  drafts  for  money,  drawn  by  oi 
upon  authorized  officers  of  the  United  States,  stamps  and 
other  representatives  of  value,  of  whatever  denomination, 
which  have  been  or  may  be  issued  under  any  Act  of 
Congress. 

FORGING  OR  COUNTERFEITING  SECURITIES;  PUNISH- 
MENT FOR. 

10;^''*-,  ¥o^-  J.'      740.   Sec.  148. — Whoever,  with  intent  to  defraud,  shall 

1909,   C.   321,   sec.    «,-,  ii<  ,(••■  ii  iTi' 

148;  35  Stat.  L.,  falscly  make,  forge,  counterfeit,  or  alter  any  obligation  or 
sec^sif^"^"!.^^^  other  security  of  the  United  States  shall  be  fined  not  more 
enactecf  JunV  30  ^'^^^  ^^^  thousaud  dollars  and  imprisoned  not  more  than 
1864.  '  fifteen  years. 

COUNTERFEITING  NATIONAL-BANK  NOTES;  PUNISH- 
MENT FOR. 

i909'*c  m*^  sec'  "^^^^  ^®^*  ^^^' — Whoever  shall  falsely  make,  forge,  or 
i49;'35' Stat.  L.'.  crounterfcit,  or  cause  or  procure  to  be  made,  forged,  or 
lec^Mfs?^"!!^*^  counterfeited,  or  shall  willingly  aid  or  assist  in  falsely 
enacted  F°b '  25^  marking,  forging,  or  counterfeiting,  any  note  in  imitation 

1863.  Reenacteci  of,  or  purporting  to  be  in  imitation  of,  the  circulating 
June  3, 1S64.        notes  issued  by  any  banking  association  now  or  hereafter 

authorized  and  acting  under  the  laws  of  the  United  States; 
or  whoever  shall  pass,  utter,  or  pubhsh,  or  attempt  to 
pass,  utter,  or  publish,  any  false,  forged,  or  counterfeited 
note,  purporting  to  be  issued  by  any  such  association  do- 
ing a  banking  business,  knowing  the  same  to  be  falsely 
made,  forged,  or  counterfeited;  or  whoever  shall  falsely 
alter,  or  cause  or  procure  to  be  falsely  altered,  or  shall 
wilhngly  aid  or  assist  in  falsely  altering,  any  such  circulat- 
ing notes,  or  shall  pass,  utter,  or  publish,  or  attempt  to 
pass,  utter,  or  pubhsh  as  true,  any  falsely  altered  or 
spurious  circulating  note  issued,  or  purporting  to  have 
been  issued,  by  any  such  banking  association,  knowing 
the  same  to  be  lalsely  altered  or  spurious,  shall  be  fined  not 
more  than  one  thousand  dollars  and  imprisoned  not  more 
than  fifteen  years, 

USING  PLATES  TO  PRINT  NOTES  WITHOUT  AUTHORITY, 
ETC.;  DISTINCTIVE  PAPER  WITHOUT  AUTHORITY; 
PUNISHMENT  FOR. 

1909^%  ^2^  sec'  '''^^*  ^®^'  ^^^' — Whoever,  having  control,  custody,  or 
150; '35'  Stat.  L.'  posscssiou  of  any  plate,  stone,  or  other  thing,  or  any  part 
sec^;54l)^^!^s.'^^^  thereof,  from  which  has  been  printed,  or  which  may  be 
enacted  JunV  30  Prepared  by  direction  of  the  Secretary  of  the  Treasury  for 

1864.  '  the  purpose  of  printing,  any  obhgation  or  other  security 

of  the  United  States,  shall  use  such  plate,  stone,  or  other 
thing,  or  any  part  thereof,  or  knowingly  suffer  the  same  to 
be  used  for  the  purpose  of  printing  any  such  or  similar  ob- 
hgation or  other  security,  or  any  part  thereof,  except  as 
may  be  printed  for  the  use  of  the  United  States  by  order 
of  the  proper  officer  thereof;  or  whoever  by  any  way,  art, 
or  means  shall  make  or  execute,  or  cause  or  procure  to  be 
made  or  executed,  or  shaU  assist  in  making  or  executing 
any  plate,  stone,  or  other  thing  in  the  hkeness  of  any  plate 
designated  for  the  printing  of  such  obligation  or  other  se- 
curity; or  whoever  shall  sell  any  such  plate,  stone,  or  other 
thing,  or  bring  into  the  United  States  or  any  place  subject 


ACTS  OP   GENERAL   NATURE.  193 

to  the  jurisdiction  thereof,  from  any  foreign  place,  any 
such  plate,  stone,  or  other  thing,  except  under  the  direc- 
tion of  the  Secretary  of  the  Treasury  or  other  proper  offi- 
cer, or  with  any  other  intent,  in  either  case,  than  that  such 
plate,  stone,  or  other  thing  be  used  for  the  printing  of  the 
obligations  or  other  securities  of  the  United  States;  or 
whoever  shall  have  in  his  control,  custody,  or  possession 
any  plate,  stone,  or  other  thing  in  any  manner  made  after 
or  in  the  similitude  of  any  plate,  stone,  or  other  thing, 
from  which  any  such  obligation  or  other  security  has  been 
printed,  with  intent  to  use  such  plate,  stone,  or  other 
thing,  or  to  suffer  the  same  to  be  used  in  forging  or  coun- 
terfeiting any  such  obhgation  or  other  security,  or  any 
part  thereof;  or  whoever  shall  have  in  his  possession  or 
custody,  except  under  authority  from' the  Secretary  of  the 
Treasury  or  other  proper  officer,  any  obligation  or  other 
security  made  or  executed,  in  whole  or  in  part,  after  the 
simihtude  of  any  obligation  or  other  security  issued  under 
the  authority  of  the  United  States,  with  intent  to  sell  or 
otherwise  use  the  same;  or  whoever  shall  print,  photo« 
graph,  or  in  any  other  manner  make  or  execute,  or  cause 
to  be  printed,  photographed,  made,  or  executed,  or  shall 
aid  in  printing,  photographing,  making,  or  executing  any 
engraving,  photograph,  print,  or  impression  in  the  hke- 
ness  of  any  such  obligation  or  other  security,  or  any  part 
thereof,   or  shall  sell  any  such  engraving,  photograph, 
print,  or  impression,  except  to  the  United  States,  or  shall 
bring  into  the  United  States  or  any  place  subject  to  the 
jurisdiction  thereof,  from  any  foreign  place  any  such  en- 
graving, photograph,  print,  or  impression,  except  by  direc- 
tion of  some  proper  officer  of  the  United  States;  or  who- 
ever shall  have  or  retain  in  his  control  or  possession,  after 
a  distinctive  paper  has  been  adopted  by  the  Secretary  of 
the  Treasury  for  the  obligations  and  other  securities  of  the 
United  States,  any  similar  paper  adapted  to  the  making 
of  any  such  obligation  or  other  security,  except  under  the 
authority  of  the  Secretary  of  the  Treasury  or  some  other 
proper  officer  of  the  United  States,  shall  be  fined  not  more 
than  five  thousand  dollars,  or  imprisoned  not  more  than 
fifteen  years,  or  both. 

UTTERING,  ETC.,  FORGED  OBLIGATIONS;    PUNISHMENT 
FOR. 

743.  Sec.  151. — Whoever,  with  intent  to  defraud,  shall  ,^^\  "«,•■•  ^  *• 
pass,  utter,  publish,  or  sell,  or  attempt  to  pass,  utter,  pub-  isi;  35  stat.  l., 
lish,  or  sell,  or  shall  bring  into  the  United  States  or  any  si^l^o^^^ri!**' 
place  subject  to  the  jurisdiction  thereof,  with  intent  to  ^  VJjf 'i^^'U' 

'■  1  !•    1  ij  11  1      11   1  •  •  enacieu  June  ju, 

pass,  publish,  utter,  or  sell,  or  shall  keep  in  possession  or  ise*. 
conceal  with  like  intent,  any  falsely  made,  lor^ed,  coun- 
terfeited, or  altered  obligation  or  other  security  of  the 
United  States,  shall  be  fined  not  more  than  five  thousand 
dollars  and  iin])risoned  not  more  than  fifteen  years. 

104312°— 20 13 


194  ACTS   OF   GENERAL   NATUEE. 

TAKING  IMPRESSIONS   OF  TOOLS,  IMPLEMENTS,   ETC.; 
PUNISHMENT  FOR. 

i909°*c  ?2T'  sto!  ''^-  ^®°"  ^^^- — Whoever,  without  authority  from  the 
i52;'35'stat.  L."  United  States,  shall  take,  procure,  or  make,  upon  lead, 
soc^543l"?i!^s'.^^  foil,  wax,  plaster,  paper,  or  any  other  substance  or  mate- 
enacted 'peb^  ^'^  ^^^^>  ^^  impression,  stamp,  or  imprint  of,  from,  or  by  the 
1867,  '    '  use  of  any  bedplate,  bedpiece,  die,  roll,  plate,  seal,  type,  or 

other  tool,  implement,  instrument,  or  thing  used  or  fitted 
or  intended  to  be  used  in  printing,  stamping,  or  impress- 
ing, or  in  making  other  tools,  implements,  instruments,  or 
things  to  be  used  or  fitted  or  intended  to  be  used  in  print- 
ing, stamping,  or  impressing  any  kind  or  description  of 
obligation  or  other  security  of  the  United  States  now 
authorized  or  hereafter  to  be  authorized  by  the  United 
States,  or  circulating  note  or  evidence  of  debt  of  any  bank- 
ing association  under  the  laws  thereof,  shall  be  fined  not 
more  than  five  thousand  dollars,  or  imprisoned  not  more 
than  ten  years,  or  both. 

HAVING     UNLAWFUL     POSSESSION     OF     IMPRESSIONS; 
PUNISHMENT  FOR. 

i9M°*c  S'  se^!  '^^^-  ^^^'  153.— Whoever,  with  intent  to  defraud,  shall 
153; '35' Stat.  L.'  have  in  his  possession,  keeping,  custody,  or  control,  with- 
sec^Msl^^il^s!^'^  out  authority  from  the  United  States,  any  imprint,  stamp, 
enactecf  'peb'  '5^  ^^  impression,  taken  or  made  upon  any  substance  or  mate- 
1867.  '    '  rial  whatsoever,  of  any  tool,  unplement,  instrument,  or 

thing,  used,  or  fitted  or  intended  to  be  used,  for  any  of  the 
purposes  mentioned  in  the  preceding  section ;  or  whoever, 
with  intent  to  defraud,  shall  sell,  give,  or  deliver  any  such 
imprint,  stamp,  or  impression  to  any  other  person,  shall 
be  fined  not  more  than  five  thousand  dollars,  or  impris- 
oned not  more  than  ten  years,  or  both. 

DEALING  IN  COUNTERFEIT  SECURITIES;    PUNISHMENT 
FOR. 

i9^°*c  ^2T*seo'  '^^^*  ^^^'  ^^^' — Whoever  shall  buy,  sell,  exchange, 
i54;'35'sta^.  L.*,  transfer,  receive,  or  deliver  any  false,  forged,  counter- 
secJ543^4"^!^^s!^"  f  eited,  or  altered  obligation  or  other  security  of  the  United 
enactid  ^Fsb' V  States,  or  circulating  note  of  any  banking  association  or- 
1867.  '    '  ganized  or  acting  under  the  laws  thereof,  which  has  been 

or  may  hereafter  be  issued  by  virtue  of  any  Act  of  Con- 
gress, with  the  intent  that  the  same  be  passed,  published, 
or  used  as  true  and  genuine,  shall  be  fined  not  more  than 
five  thousand  dollars,  or  imprisoned  not  more  than  ten 
years,  or  both. 

CIRCULATING  BILLS  OF  EXPIRED  BANKS;   PUNISHMENT 
FOR;   CIRCULATION  PERMITTED. 

1909* c  mY' sec'  '''*''•  Sec.  174. — Inallcases  where  the  charter  of  any  cor- 
174; '35"  sta^.  L.",  poratiou  which  has  been  or  may  be  created  by  Act  of  Con- 
fiia  S43^7"?i"s!^*^  gress  has  expired  or  may  hereafter  expire,  if  any  director, 
•nacti^'jufy '/  officer,  or  agent  of  the  corporation,  or  any  trustee  thereof, 
1838.  '  or  any  agent  of  such  trustee,  or  any  person  having  in  his 

possession  or  under  his  control  the  property  of  the  corpo- 


ACTS  OF  GENERAL  NATURE. 


195 


ration  for  the  purpose  of  paying  or  redeeming  its  notes 
and  obligations,  shall  knowingly  issue,  reissue,  or  utter  ag 
money,  or  in  any  other  way  knowingly  put  in  circulation 
any  bill,  note,  check,  draft,  or  other  security  purporting 
to  have  been  made  by  any  such  corporation  whose  charter 
has  expired,  or  by  any  officer  thereof,  or  purporting  to 
have  been  made  under  authority  derived  therefrom,  or  if 
any  person  shall  knowingly  aid  in  any  such  act,  he  shall  be 
fined  not  more  than  ten  thousand  dollars,  or  imprisoned 
not  more  than  five  years,  or  both.  But  nothing  herein 
shall  be  construed  to  make  it-unlawful  for  any  person,  not 
being  such  director,  officer,  or  agent  of  the  corporation, 
or  any  trustee  thereof,  or  any  agent  of  such  trustee,  or  any 
person  having  in  his  possession  or  under  his  control  the 
property  of  the  corporation  for  the  purpose  hereinbefore 
set  forth,  who  has  received  or  may  hereafter  receive  such 
bill,  note,  check,  draft,  or  other  security,  bona  fide  and  in 
the  ordinary  transactions  of  business,  to  utter  as  money  or 
otherwise  circulate  the  same. 

FRAUDULENT  NOTES  TO  BE  SO  MARKED  BY  UNITED 
STATES  OFFICERS  AND  OFFICERS  OF  NATIONAL 
BANES.     ACT  JUNE  30,  1876. 

748.  Sec.  5.— That  all  United  States  officers  charged  ^^^^  Jji°«.  3o, 
with  the  receipt  or  disbursement  of  public  moneys,  and  stat'.  l.,  m.' ' 
all  officers  of  national  banks,  shall  stamp  or  write  in  plain 
letters  the  word  "counterfeit"  "altereci"  or  "worthless," 
upon  all  fraudulent  notes  issued  in  the  form  of,  and  in- 
tended to  circulate  as  money,  which  shall  be  presented  at 
their  places  of  business;  and  if  such  officer  shall  wrong- 
fully stamp  any  genuine  note  of  the  United  States,  or  of 
the  national  banks,  they  shall,  upon  presentation,  redeem 
such  notes  at  the  face  value  thereof. 


CURRENCY   ACT,    APPROVED  MARCH   14,  1900. 


749.  Section  1.  Gold  dollar  declared  to  be 

standard  unit  of  value. 

750.  Sec.  2.  Secretary  of  Treasury  to  set 

apart  and  maintain  a  gold  reserve 
of  one  hundred  and  fifty  million 
dollars  in  gold  coin  and  bullion 
for  the  redemption  of  United 
States  notes  and  notes  issued 
under  the  act  of  July  14,  1890. 
May  sell  bonds  to  replenish  re- 
serve. 

751.  Sec.  3.  Silver  dollar  to  remain  legal 

tender. 

752.  Sec.  4.  Divisions  of  issue   and     e- 

demption  established. 

753.  Sec.  5.  When     silver     dollars     are 

coined  from  bullion  purchased 
under  act  of  July  14,  1890,  an 
equal  amount  of  Treasury  notes 
to  be  canceled  and  silver  certifi- 
cates issued. 


754 


7.55. 
756. 
757. 

758. 


759. 
760. 


761. 
762. 


Sec.  6.  Issue    of    gold    certificates. 
Issue  of  gold  certificates  payable 
to  order. 

Sec.  7.  Issue  of  silver  certificates. 

Sec.  8.  Subsidiary  silver  coinage. 

Sec.  9.  Recoinage  of  uncurrent  sub- 
sidiary silver  coin. 

Sec.  10.  Amends  section  5138,  Re- 
vised Statutes.  (See  said  sec- 
tion under  national-bank  act.) 

Sec.  11.  Refunding  of  United  Statea 
bonds. 

Sec.  13.  This  section  is  inserted  in 
national-bank  act  following  sec- 
tion 5171.  which  it  supersedes. 

Sec.  13.  See  sec.  5214,  Revised  Stat- 
utes, under  national-bank  act. 

Sec.  14.  International    bimetallism. 


An  Act  To  define  and  fix  the  standard  of  value,  to  maintain  the  parity 
of  all  forms  of  money  issued  or  coined  by  the  United  States,  to  refund 
the  public  debt,  and  for  other  purposes. 


196  ACTS   OF   GENERAL   NATURE. 

GOLD  DOLLAR  DECLARED  TO  BE  STANDARD  UNIT  OF 
YALUE. 

19TO  *  s^^^i-  "i  ''^^-  -^^  '^^  enacted  hy  the  Senate  and  House  of  Repre- 
Stat'.  L.,  45.  '  sentatives  of  the  United  States  of  America  in  Congress 
assembled,  That  the  dollar  consisting  of  twenty-five  and 
eight-tenths  grains  of  gold  nine-tenths  fine,  as  established 
by  section  thirty-five  hundred  and  eleven  of  the  Revised 
Statutes  of  the  United  States,  shall  be  the  standard  unit 
of  value,  and  all  forms  of  money  issued  or  coined  by  the 
United  States  shall  be  maintained  at  a  parity  of  value 
with  this  standard,  and  it  shall  be  the  duty  of  the  Secre- 
tary of  the  Treasury  to  maintain  such  parity. 

SECRETARY  OF  TREASURY  TO  SET  APART  AND  MAIN- 
TAIN A  GOLD  RESERVE  OF  ONE  HUNDRED  AND  FIFTY 
MILLION  DOLLARS  IN  GOLD  COIN  AND  BULLION  FOR 
THE  REDEMPTION  OF  UNITED  STATES  NOTES  AND 
NOTES  ISSUED  UNDER  ACT  OF  JULY  14,  1890.  MAT 
SELL  BONDS  TO  REPLENISH  RESERVE. 

jg^rt  s^^2-  "'  '^^^-  ^®°-  2.— That  United  States  notes,  and  Treasury 
Stat.  L.,  45.  '  notes  issued  under  the  Act  of  July  fourteenth,  eighteen 
hundred  and  ninety,  when  presented  to  the  Treasury  for 
redemption,  shall  be  redeemed  in  gold  coin  of  the  stand- 
ard fixed  in  the  first  section  of  this  Act,  and  in  order  to 
secure  the  prompt  and  certain  redemption  of  such  notes 
as  herein  provided  it  shall  be  the  duty  of  the  Secretary  of 
the  Treasury  to  set  apart  in  the  Treasury  a  reserve  fund 
of  one  hundred  and  fifty  million  dollars  in  gold  coin  and 
bullion,  which  fund  shall  be  used  for  such  redemption 
purposes  only,  and  whenever  and  as  often  as  any  oi  said 
notes  shall  be  redeemed  from  said  fund  it  shall  be  the 
duty  of  the  Secretary  of  the  Treasiu-y  to  use  said  notes  so 
redeemed  to  restore  and  maintain  such  reserve  fund  in 
the  manner  foUo\s'ing,  to  wit:  First,  by  exchanging  the 
notes  so  redeemed  for  any  gold  coin  in  the  general  fund  of 
the  Treasury;  second,  by  accepting  deposits  of  gold  coin 
at  the  Treasury  or  at  any  subtreasury  in  exchange  for  the 
United  States  notes  so  redeemed ;  third,  by  procuring  gold 
coin  by  the  use  of  said  notes,  in  accordance  with  the  pro- 
visions of  section  thirty-seven  hundred  of  the  Revised 
Statutes  of  the  United  States.  If  the  Secretary  of  the 
Treasury  is  unable  to  restore  and  maintain  the  gold  coin 
in  the  reserve  fund  by  the  foregoing  methods,  and  the 
amount  of  such  gold  coin  and  bullion  in  said  fund  shall  at 
any  time  fall  below  one  hundred  million  dollars,  then  it 
shall  be  his  duty  to  restore  the  same  to  the  maximum  sum 
of  one  hundred  and  fifty  million  dollars  by  borrowing 
money  on  the  credit  of  the  United  States,  and  for  the 
debt  thus  incurred  to  issue  and  sell  coupon  or  registered 
bonds  of  the  United  States,  in  such  form  as  he  may  pre- 
scribe, in  denominations  of  fifty  dollars  or  any  multiple 
thereof,  bearing  interest  at  the  rate  of  not  exceeding  three 

Ear  centum  per  annum,  payable  quarterly,  such  bonds  to 
e  payable  at  the  pleasure  of  the  United  States  after  one 
year  from  the  date  of  their  issue,  and  to  be  payable,  prin- 


ACTS   OF   GENERAL   NATURE.  J 97 

cipal  and  interest,  in  gold  coin  of  the  present  standard 
value,  and  to  be  exempt  from  the  payment  of  all  taxes  or 
duties  of  the  United  otates,  as  well  as  from  taxation  in 
any  form  by  or  under  State,  municipal,  or  local  author- 
ity; and  the  gold  coin  received  from  the  sale  of  said  bonds 
shall  first  be  covered  into  the  general  fund  of  the  Treas- 
ury and  then  exchanged,  in  the  manner  hereinbefore  pro- 
vided, for  an  equal  amount  of  the  notes  redeemed  and 
held  for  exchange,  and  the  Secretary  of  the  Treasury 
may,  in  his  discretion,  use  said  notes  in  exchange  for 
gol(i,  or  to  purchase  or  redeem  any  bonds  of  the  United 
States,  or  for  any  other  lawful  purpose  the  pubHc  in- 
terests may  recjuire,  except  that  tliey  shall  not  be  used  to 
meet  deficiencies  in  the  current  revenues.  That  United 
States  notes  when  redeemed  in  accordance  \nth  the  pro- 
visions of  this  section  shall  be  reissued,  but  shall  be  held 
in  the  reserve  fmid  until  exchanged  for  gold,  as  herein 

f>rovided;  and  the  gold  coin  and  bullion  in  the  reserve 
und,  together  with  the  redeemed  notes  held  for  use  as 
provided  in  this  section,  shall  at  no  time  exceed  the 
maximum  siun  of  one  hundred  and  fifty  million  dollars. 

Note. — Section  7  of  the  Federal  reserve  act  provides  that  the  net 
eamingrs  derived  by  the  United  States  from  Federal  reserve  banks  shall, 
in  the  discretion  of  the  Secretary,  be  used  to  supplement  the  gold  reserve 
held  against  outstanding  United  States  notes,  or  shall  be  applied  to  the 
reduction  of  the  outstanding  bonded  indebtedness  of  the  United  States 
under  regulations  to  be  prescribed  by  the  Secretary  of  the  Treasury. 

SILVER  DOLLAR  TO  REMAIN  LEGAL  TENDER. 

751.  Sec.  3. — That  nothing  contained  in  this  Act  shall  jg^ct   Mar    u, 
be  construed  to  effect  the  legal-tender  quality  as  now  pro-  stat.  i^,'i6.'    ^^ 
vided  by  law  of  the  silver  dollar,  or  of  any  other  money 
coined  or  issued  by  the  United  States. 

DIVISIONS   OF  ISSUE  AND  REDEMPTION  ESTABLISHED. 

762.  Sec.  4. — That  there  be  established  in  the  Treasury  ^^^  Mar.  u. 
Department,  as  a  part  of  the  office  of  the  Treasurer  of  the  stat'  l^46.  ' 
United  States,  divisions  to  be  designated  and  known  as 
the  division  of  issue  and  the  division  of  redemption,  to 
which  shall  be  assigned,  respectively,  under  sucn  regula- 
tions as  the  Secretary  of  the  Treasury  may  approve,  all 
records  and  accounts  relating  to  the  issue  and  redemption 
of  United  States  notes,  gold  certificates,  silver  certificates, 
and  currency  certificates.  There  shall  be  transferred 
from  the  accounts  of  the  general  fund  of  the  Treasury  of 
the  United  States,  and  taken  up  on  the  books  of  said  di- 
visions, respectively,  accounts  relating  to  the  reserve  fund 
for  the  redemption  of  United  States  notes  and  Treasury 
notes,  the  gold  coin  held  against  outstanding  gold  certifi- 
cates, the  United  States  notes  held  against  outstanding 
currency  certificates,  and  the  silver  dollars  held  against 
outstanding  silver  certificates,  and  each  of  the  funds  rep- 
resented by  these  accounts  shall  be  used  for  the  redemp- 
tion of  the  notes  and  certificates  for  which  they  are 
respectively  pledged,  and  shall  be  used  for  no  other  pur- 
pose, the  same  being  held  as  trust  funds. 


198  ACTS   OF   GENERAL   NATURE. 

WHEN    SILVER   DOLLARS    ARE    COINED   FROM  BULLION 
•     PURCHASED  UNDER  ACT  OF  JULY  14,  1890,  AN  EQUAL 
AMOUNT  OF  TREASURY  NOTES  TO  BE  CANCELED  AND 
SILVER  CERTIFICATES  ISSUED. 

lew* s^%  ^k  '^^^'  ^^^-  5.— That  it  shall  be  the  duty  of  the  Secretary 
Stat.  L.,  47.  '  of  the  Treasury,  as  fast  as  standard  silver  dollars  are 
coined  under  the  provisions  of  the  Acts  of  July  four- 
teenth, eighteen  hundred  and  ninety,  and  June  thirteenth, 
dighteen  hundred  and  ninety-eight,  from  buUion  pur- 
chased under  the  Act  of  July  fourteenth,  eighteen  hun- 
dred and  ninety,  to  retire  and  cancel  an  equal  amount  of 
Treasury  notes  whenever  received  into  the  Treasury, 
either  by  exchange  in  accordance  with  the  provisions  of 
this  Act  or  in  the  ordinary  course  of  business,  and  upon 
the  cancellation  of  Treasury  notes  silver  certificates  shall 
be  issued  against  the  silver  dollars  so  coined. 

ISSUE  OF  GOLD  CERTIFICATES.     ISSUE  OF  GOLD  CER- 
TIFICATES PAYABLE  TO  ORDER. 

jgAct  ^Mar.  14^  754.  Sec.  6  [as  amended  by  acts  of  March  4, 1907,  March  2, 
Stat.  L.,  47.  '  1911,  and  June  12,  1916]. — That  the  Secretary  of  the  Treas- 
sec^f:  34*stat;^L!;  ury  is  hereby  authorized  and  directed  to  receive  deposits  of 
^^Act  Mar  2  S^ld  coin  with  the  Treasurer,  or  any  assistant  treasurer  of 
1911;  36  Stat.  L.;  the  United  States,  in  sums  of  not  less  than  twenty  dollars, 
^ct  June  12,  a-nd  to  issuc  gold  certificates  therefor  in  denominations 
1916;  39  Stat.  L.,  of  not  less  than  ten  dollars,  and  the  coin  so  deposited  shall 
be  retained  in  the  Treasury  and  held  for  the  payment  of 
such  certificates  on  demand,  and  used  for  no  other  pur- 
pose. Such  certificates  shall  be  receivable  for  customs, 
taxes,  and  all  pubhc  dues,  and  when  so  received  may  be 
reissued,  and  when  held  by  any  national  banking  asso- 
ciation may  be  counted  as  a  part  of  its  la%vful  reserve: 
Provided,  That  whenever  and  so  long  as  the  gold  coin 
and  bullion  held  in  the  reserve  fund  in  the  Treasury  for 
the  redemption  of  United  States  notes  and  Treasury 
notes  shall  fall  and  remain  below  one  hundred  million 
dollars  the  authority  to  issue  certificates  as  herein  pro- 
vided shall  be  suspended:  And  provided  further,  Thsit 
whenever  and  so  long  as  the  aggregate  amount  of  United 
States  notes  and  silver  certificates  in  the  general  fund  of 
the  Treasury  shall  exceed  sixty  million  dollars  the  Secre- 
tary of  the  Treasury  may,  in  his  discretion,  suspend  the 
issue  of  the  certificates  herein  provided  for:  And  pro- 
vided further,  That  of  the  amount  of  such  outstanding 
certificates  one-fourth  at  least  shall  be  in  denominations 
of  fifty  dollars  or  less :  And  provided  further,  That  the 
Secretary  of  the  Treasury  may,  in  his  discretion,  issue 
such  certificates  in  denominations  of  ten  thousand  dollars, 
payable  to  order:  And  provided  further.  That  the  Secre- 
tary of  the  Treasury  may,  in  his  discretion,  receive,  with 
the  assistant  treasurer  in  New  York  and  the  assistant 
treasurer  in  San  Francisco,  deposits  of  foreign  gold  coin 
at  their  bullion  value  in  amounts  of  not  less  than  one 
thousand  dollars  in  value  and  issue  gold  certificates  there- 


ACTS   OF   GENERAL   NATURE.  199 

for  of  the  description  herein  authorized:  And  provided 
further,  That  the  Secretary  of  the  Treasury  may,  in  his 
discretion,  receive,  with  the  Treasurer  or  any  assistant 
treasurer  of  the  United  States,  deposits  of  gold  buUion 
bearing  the  stamp  of  the  coinage  mints  of  the  United 
States,  or  the  assay  office  in  New  York,  certifying  their 
weight,  fineness,  and  value,  in  amounts  of  not  less  than 
one  thousand  dollars  in  value,  and  issue  gold  certificates 
therefor  of  the  description  herein  authorized.  But  the 
amount  of  gold  buUion  and  foreign  coin  so  held  shall  not 
at  any  time  exceed  two  thirds  of  the  total  amount  of  gold 
certificates  at  such  time  outstanding.  And  section  fifty- 
one  hundred  and  ninety-three  of  the  Revised  Statutes  of 
the  United  States  is  hereby  repealed. 

ISSUE  OF  SILVER  CERTIFICATES. 

755.  Sec.  7. — That  hereafter  silver  certificates  shall  be  ,Jt^^  ^'4  H 
issued  only  of  denominations  of  ten  dollars  and  under,  stat.  l.,  47. ' 
except  that  not  exceeding  in  the  aggregate  ten  per  centum 
of  the  total  volume  of  said  certificates,  in  the  discretion 
of  the  Secretary  of  the  Treasur}^,  may  be  issued  in  denom- 
inations of  twenty  dollars,  fifty  dollars,  and  one  hundred 
dollars;  and  silver  certificates  of  higher  denomination 
than  ten  dollars,  except  as  herein  provided,  shall,  when- 
ever received  at  the  Treasury  or  redeemed,  be  retired  and 
canceled,  and  certificates  of  denominations  of  ten  dollars 
or  less  shall  be  substituted  therefor,  and  after  such  sub- 
stitution, in  whole  or  in  part,  a  Uke  volume  of  United 
States  notes  of  less  denomination  than  ten  dollars  shall 
from  time  to  time  be  retired  and  canceled,  and  notes  of 
denominations  of  ten  dollars  and  upward  shall  be  reis- 
sued in  substitution  therefor,  with  like  quahties  and  re- 
strictions as  those  retired  and  canceled. 

Note. — The  act  of  February  28,  1878,  authorized  the  issue  of  silver 
certificates  in  sums  of  not  less  than  ten  dollars.  The  act  of  March  3, 
1887,  authorized  the  issue  of  one,  two,  and  five  dollar  certificates. 
This  section  supersedes  these  acts  as  to  all  new  issues. 

SUBSIDIARY  SILVER  COINAGE. 

766,  Sec.  8.— That  the •  Secretary  of  the  Treasury  is  .^''t  5^'':  [*: 
hereby  authorized  to  use,  at  his  discretion,  any  silver  stat.  l.,  47. 
bullion  in  the  Treasury  of  the  United  States  purchased 
under  the  Act  of  July  fourteenth,  eighteen  hundred  and 
ninety,  for  coinage  into  such  denominations  of  subsidiary 
silver  coin  as  may  be  necessary  to  meet  the  public  require- 
ments for  such  coin:  Provided,  That  the  amount  of  sub- 
sidiary silver  coin  outstanding  sliall  not  at  any  time  ex- 
ceed in  the  aggregate  one  hundred  millions  of  dollars. 
Whenever  an}^  silver  bullion  purchased  under  tlie  Act  of 
July  fourteenth,  eighteen  hundred  and  ninety,  shall  bo 
used  in  the  coinage  of  subsidiar}^  silver  coin,  an  amount 
of  Treasury  notes  issued  under  said  Act  equal  to  the  cost 
of  the  bullion  contained  in  such  coin  shall  be  canceled 
and  not  reissued. 


200  ACTS   OF    GENERAL    NATURE. 

EECOINAGE  OF  UNCURRENT  SUBSIDIARY  SILVER  COIN. 

i9oo:*sec%  31  '^^'^'  Sec.  9.--That  the  Secretary  of  the  Treasury  is 
Stat'.  L,,  48.  '  hereby  authorized  and  directed  to  cause  all  worn  and  un- 
cmrent  subsidiary  silver  coin  of  the  United  States  now 
in  the  Treasury,  and  hereafter  received,  to  be  recoined, 
and  to  reimburse  the  Treasurer  of  the  United  States  for 
the  difference  between  the  nominal  or  face  value  of  such 
coin  and  the  amount  the  same  will  produce  in  new  coin 
from  any  moneys  in  the  Treasury  not  otherwise  appro- 
priated. 

758.  Sec.  10.— 

Amends  section  5138,  Re\Tsed  Statutes.     (See  said  section  under 

National-bank  act.) 

REFUNDING  OF  UNITED  STATES  BONDS. 

i9oo\t^h;  ^zi  "^^^^  S®^'  11-— That  the  Secretary  of  the  Treasury  is 
Stat.  L.,k  '  hereby  authorized  to  receive  at  the  Treasury  any  of  the 
outstanding  bonds  of  the  United  States  bearing  interest 
at  five  per  centum  per  annum,  paj-able  February  first, 
nineteen  hundred  and  four,  and  any  bonds  of  the  United 
States  bearing  interest  at  four  per  centum  per  annimi, 
payable  July  first,  nineteen  hundred  and  seven,  and  any 
bonds  of  the  United  States  bearing  interest  at  three  per 
centum  per  annum,  payable  August  first,  nineteen  hun- 
dred and  eight,  and  to  issue  in  exchange  therefor  an  equal 
amount  of  coupon  or  registered  bonds  of  the  United 
States  in  such  form  as  he  may  prescribe,  in  denomina- 
tions of  fifty  dollars  or  any  multiple  thereof,  bearing 
interest  at  the  rate  of  two  per  centum  per  annum,  payable 
quarterly,  such  bonds  to  be  payable  at  the  pleasure  of 
the  United  States  after  thirty  years  from  the  date  of 
their  issue,  and  said  bonds  to  be  payable,  principal  and 
interest,  in  gold  coin  of  the  present  standard  value,  and 
to  be  exempt  from  the  payment  of  all  taxes  or  duties 
of  the  United  States,  as  well  as  from  taxation  in  any 
form  by  or  under  State,  municipal,  or  local  authority: 
Provided,  That  such  outstanding  bonds  may  be  received 
in  exchange  at  a  valuation  not  greater  than  their  present 
worth  to  yield  an  income  of  two  and  one-quarter  per 
centum  per  annum ;  and  in  consideration  of  the  reduction 
of  interest  effected,  the  Secretary  of  the  Treasury  is  au- 
thorized to  pay  to  the  holders  of  the  outstanding  bonds 
surrendered  for  exchange,  out  of  any  money  in  the  Treas- 
ury not  otherwise  appropriated,  a  sum  not  greater  than 
the  difference  between  their  present  worth,  computed  as 
aforesaid,  and  their  par  value,  and  the  payments  to  be 
made  hereunder  shall  be  lield  to  be  payments  on  account 
of  the  sinking  fund  created  by  section  thirty-six  hundred 
and  ninety-four  of  the  Revised  Statutes:  And  jJf'ovided 
further,  That  the  two  per  centum  bonds  to  be  issued  un- 
der the  provisions  of  this  Act  shall  be  issued  at  not  less 
than  par,  and  they  shall  be  numbered  consecutively  in 
the  order  of  their  issue,  and  when  payment  is  made  the 


ACTS  OF  GENERAL  NATURE.  201 

last  numbers  issued  shall  be  first  paid,  and  this  order  shall 
be  followed  until  all  the  bonds  are  paid,  and  whenever 
any  of  the  outstanding  bonds  are  called  for  payment  in- 
terest thereon  shall  cease  tliree  months  after  such  call; 
and  there  is  hereby  appropriated  out  of  any  money  in 
the  Treasury  not  otherwise  appropriated,  to  effect'  the 
exchanges  of  bonds  provided  for  in  this  Act,  a  sum  not 
exceeding  one-fifteenth  of  one  per  centum  of  the  face 
value  of  said  bonds,  to  pay  the  expense  of  preparing  and 
issuing  the  same  and  other  expenses  incident  thereto. 

760.  Sec.  12.— 

This  section  is  inserted  in  the  national-bank  act  following  sectioQ 
5171  wh"ch  it  supersedes. 

761.  Sec.  13.— 
See  paragraph  445. 

INTERNATIONAL  BIMETALLISM. 

762.  Sec.  14.— That  the  provisions  of  this  Act  are  not  19^"* se?"i4-  si 
intended    to    preclude    the    accomplishment    of    inter-  stat,  u%9.  ' 
national  bimetallism  whenever  conditions  shall  make  it 
expedient  and  practicable  to  secure  the  same  by  concur- 
rent action  of  the  leading  commercial  nations  of  the 

world  and  at  a  ratio  which  shall  insure  permanence  of 
relative  value  between  gold  and  silver. 

ACT  MARCH    4,    1907. 

763.  Sec.  1.  Amends  section  6  of  act  of 

March  14.  1900. 

764.  Sec.  2.  Issue  of  Treasury  notes. 

765.  Sec.  3.  Amends  section  5153  of  the 

Revised  Statutes. 

763.  Sec.  1,  Act  March  4,  1907. 

Amends  section  6  of  act  of  March  14,  1900.     This  amended  section 
is  incorporated  in  said  act,  paragraph  754,  ante. 

ISSUE  OF  TREASURY  NOTES.     ACT  MARCH  4,  1907. 

764.  Sec.  2.— That  whenever  and  so  long  as  the  out-  ^^S*  ^ec^%'-    h 
standing  silver  certificates  of  the  denominations  of  one  >"tat'.  l,  Liiii. 
dollar,   two  dollars,   and  five  dollars,  issued  under    the 
provisions  of  section  seven  of  an  Act  entitled  "An  Act 

to  define  and  fix  the  standard  of  value,  to  maintam  the 
parity  of  all  forms  of  money  issued  or  coined  by  the 
United  States,  to  refund  the  public  debt,  and  for  other 
])urposes,"  approved  March  fourteenth,  nineteen  hun- 
dred, shall  be,  in  the  opinion  of  the  Secretary  of  the 
Treasury,  insufficient  to  meet  the  public  demand  there- 
for, he  is  hereby  authorized  to  issue  United  States  notes 
of  the  denominations  of  one  dollar,  two  dollars,  and  five 
dollars,  and  upon  the  issue  of  United  States  notes  of  such 
denominations  an  equal  amount  of  United  States  notes  of 
higher  denominations  shall  be  retired  and  canceled:  Pro- 
vQed,  however,  That  the  aggregate  amount  of  United 
States  notes  at  any  time  outstanding  shall  remain  as  at 


766.  Sec.  4.  Amends  section  9  of  act  of 
July  12.  1882.  The  amended 
section  follows  section  5167  of 
the  Revised  Statutes. 


202  ACTS   OF   GENERAL   NATURE. 

present  fixed  by  law:  And  provided  further,  That  nothing 
in  this  Act  shall  be  construed  as  affecting  the  right  of  any 
national  bank  to  issue  one-third  in  amount  of  its  circu- 
lating notes  of  the  denomination  of  five  dollars,  as  now 
provided  by  law. 

765.  Sec.   3.— 

Amends  section  5153,  Revised  Statutes,  paragraph  243,  ante. 

766.  Sec.   4.— 

Amends  section  9  of  act  of  July  12,  1882,  as  amended  by  act  of  March 
14,  1900.     See  paragraph  314,  ante. 

PANAMA    CANAL    BONDS. 

PANAMA  CANAL  BONDS— ADDITIONAL  ISSUE  AUTHOR- 
IZED AT  RATE  OF  INTEREST  NOT  TO  EXCEED  3  PER 
CENT  PER  ANNUM. 

iwfsJ'l^-  h  '^^'^'  ^®°-  39.— That  the  Secretary  of  the  Treasury  is 
Stat.  L.,  117.'  hereby  authorized  to  borrow  on  the  credit  of  the  United 
States,  from  time  to  time,  as  the  proceeds  may  be  required 
to  defray  expenditures  on  account  of  the  Panama  Canal 
and  to  reimburse  the  Treasury  for  such  expenditures 
already  made  and  not  covered  by  previous  issues  of  bonds, 
the  sum  of  two  hundred  and  ninety  miUion  five  hundred 
and  sixty-nine  thousand  dollars  (which  sum  together 
with  the  eighty-four  million  six  hundred  and  thirty-one 
thousand  nine  hundred  dollars  abeady  borrowed  upon 
issues  of  two  per  cent  bonds  under  section  eight  of  the 
Act  of  June  twenty-eight,  nineteen  hundred  and  two, 
equals  the  estimate  of  the  Isthmian  Canal  Commission 
to  cover  the  entire  cost  of  the  Canal  from  its  inception  to 
its  completion),  and  to  prepare  and  issue  therefor  coupon 
or  registered  bonds  of  the  United  States  in  such  form  as 
he  may  prescribe,  and  in  denominations  of  one  hundred 
doUars,  five  hundred  dollars,  and  one  thousand  dollars, 
payable  fifty  years  from  the  date  of  issue,  and  bearing 
interest  payable  quarterly  in  gold  coin  at  a  rate  not  ex- 
ceeding three  per  centum  per  annum;  and  the  bonds 
herein  authorized  shall  be  exempt  from  aU  taxes  or  duties 
of  the  United  States,  as  weU  as  from  taxation  in  any  form 
by  or  under  State,  mimicipal,  or  local  authority:  Pro- 
vided, That  said  bonds  may  be  disposed  of  by  the  Secre- 
tary of  the  Treasury  at  not  less  than  par,  under  such 
regulations  as  he  may  prescribe,  giving  to  all  citizens  of 
the  United  States  an  equal  opportunity  to  subscribe 
therefor,  but  no  commissions  shall  be  allowed  or  paid 
thereon;  and  a  sum  not  exceeding  one-tenth  of  one  per 
centum  of  the  amount  of  the  bonds  herein  authorized  is 
hereby  appropriated,  out  of  any  money  in  the  Treasury 
not  otherwise  appropriated,  to  pay  the  expenses  of  pre- 
paring, advertising,  and  issuing  the  same;  and  the  au- 
thority contained  in  section  eight  of  the  Act  of  June 
twenty-eight,  nineteen  hundred  and  two,  for  the  issue  of 
bonds  bearing  interest  at  two  per  centum  per  annum,  is 
hereby  repealed. 


ACTS   OF    GENERAL   NATURE.  203 

PANAMA  CANAL  BONDS  ISSUED  UNDER  ACT  OF  AUGUST 
5,  1909,  NOT  RECEIVABLE  AS  SECURITY  FOR  THE 
ISSUE  OF  CIRCULATING  NOTES  TO  NATIONAL  BANKS. 

768.  Be  it  enacted  hy  the  Senate  and  House  of  Repre-    Act    Mar.    2^ 
sentatives  of  the    United  States  of  America  in   Congress  stat'.  l!,'  1013.' 
assembled,  That  the  Secretary  of  the  Treasury  be,  and  he 

is  hereby,  authorized  to  insert  in  the  bonds  to  be  issued 
by  him  under  section  thirty-nine  of  an  Act  entitled  "An 
Act  to  provide  revenue,  equahze  duties,  and  encourage 
the  industries  of  the  United  States,  and  for  other  pur- 
poses," approved  August  fifth,  nineteen  hundred  and 
nine,  a  provision  that  such  bonds  shall  not  be  receivable 
by  the  Treasurer  of  the  United  States  as  security  for 
the  issue  of  circulating  notes  to  national  banks;  and  the 
bonds  containing  such  provision  shall  not  be  receivable 
for  that  purpose. 

CERTIFIED    CHECKS    WHEN    RECEIVABLE    FOR    DUTIES    AND 

TAXES. 

CERTIFIED  CHECKS  DRAWN  ON  NATIONAL  AND  STATE 
BANKS  RECEIVABLE  FOR  DUTIES  ON  IMPORTS  AND 
INTERNAL  TAXES.     ACT  MARCH  2,  1911. 

769.  Be  it  enacted  hy  the  Senate  and  House  of  Repre- 
sentatives of  the    United  States  of  America  in   Congress 
assembled,  That  it  shall  be  law'ful  for  collectors  of  cus-    Act    Mar.    i. 
toms  and  of  internal  revenue  to  receive  for  duties  on  im-  stat'.  l!,'  965!' 
ports  and  internal  taxes  certified  checks  drawn  on  na- 
tional and  State  banks,  and  trust  companies  during  such 

time  and  under  such  regulations  as  the  Secretary  of  the 
Treasury  may  prescribe.  No  person,  however,  who  may 
be  indebted  to  the  United  States  on  account  of  duties  on 
imports  or  internal  taxes  who  shall  have  tendered  a  cer- 
tified check  or  checks  as  provisional  pa}Tnent  for  such 
duties  or  taxes,  in  accordance  with  the  terms  of  this  Act, 
shall  be  released  from  the  obligation  to  make  ultimate 
payment  thereof  until  such  certified  check  so  received  has 
been  duly  paid;  and  if  any  such  check  so  received  is  not 
duly  paid  by  the  bank  on  which  it  is  dra\\-n  and  so  certi- 
fying, the  United  States  shall,  in  addition  to  its  right  to 
exact  payment  from  the  party  originally  indebted  there- 
for, have  a  lien  for  the  amount  of  such  check  upon  all  the 
assets  of  suc];^  bank;  and  such  amount  shall  be  paid  out  of 
its  assets  in  preference  to  any  or  all  other  claims  whatso- 
ever against  said  bank,  except  the  necessary  costs  and  ex- 
penses of  administration  and  the  reimbursement  of  the 
United  States  for  the  amount  expended  in  the  redemption 
of  the  circulating  notes  of  such  bank. 

Sec.  2.  That  this  Act  shall  be  effective  on  and   after 
June  first,  nineteen  hundred  and  eleven. 

CERTIFIED  CHECKS— WHEN  RECEIVABLE  FOR  DUTIES 
AND  TAXES.     ACT  MARCH  3,  1913. 

770.  Be  it  enacted  by  the  Senate  and  House  of  Repre- 
sentatives of  th4    United  States  of  America  in   Congress 


204  ACTS  OF  GENEBAL  NATURE. 

igfsf  c.^m  ij  o^semhled,  That  it  shall  be  lawful  for  coUecting  ofRcers 
Stat,  l'.,  733.'  to  receivG  certified  checks  drawn  on  national  and  State 
banks  and  trust  companies,  during  such  time  and  under 
such  regulations  as  the  Secretary  of  the  Treasury  may 
prescribe,  in  payment  for  duties  on  imports,  internal  taxes, 
and  all  public  dues,  including  special  customs  deposits; 
and  the  Act  of  March  second,  nineteen  hundred  and 
eleven,  entitled  "An  Act  to  authorize  the  receipt  of  certi- 
fied checks  for  duties  on  imports  and  internal  taxes,"  is 
hereby  amended  accordingly. 

AMERICAN   NATIONAL   RED   CROSS. 

NATIONAL     BANKS     AUTHORIZED     TO     SUBSCRIBE     TO 
AMERICAN  NATIONAL  RED  CROSS  DURING  THE  WAR. 

,qAP*  ^^y  ^'  771.  Be  it  enacted  hy  the  Senate  and  House  of  Repre- 
sentatives  oj  the  United  States  oj  America  in  Congress 
assembled,  Tliat  during  the  continuance  of  the  state  of 
war  now  existing  it  shaU  be  lawful  for  any  national  bank- 
ing association  to  contribute  to  the  American  National 
Red  Cross,  out  of  any  net  profits  otherwise  available 
under  the  law  for  the  declaration  of  dividends,  such  sum 
or  sums  as  the  directors  of  said  association  shall  deem 
expedient.  Each  association  shall  report  to  the  Comp- 
troller of  the  Currency  within  ten  days  after  the  making 
of  any  such  contribution,  the  amount  of  such  contribu- 
tion, and  the  amount  of  net  earnings  in  excess  of  such 
contribution.  Such  report  shall  be  attested  by  the  presi- 
dent or  cashier  of  the  association  in  hke  manner  as  the 
report  of  the  declaration  of  any  dividend. 

Sec  2.  That  all  sums  so  contributed  shall  be  utilized 
by  the  American  National  Red  Cross  in  furnishing  vol- 
unteer aid  to  the  sick  and  wounded  of  the  combatant 
armies,  the  voluntarv  relief  of  the  Army  and  Navy  of  the 
United  States,  and  the  relief  and  mitigation  of  the  suffer- 
ing caused  by  the  war  to  the  people  of  the  United  States 
and  their  aUied  nations. 


SPECIAL  ACTS. 


205 


CHAPTER  VIII. 


SPECIAL    ACTS    RELATING    TO    NATIONAL    BANKS. 


1900.     National  bank- 
applicable    to    Porto 


800.  Act  April  12, 

ing    laws 
Rico. 

801.  Act  April  30,  1900.     National  bank- 

ing laws  applicable  to  Hawaii. 


802.  Granting  Fifth-Third  National  Bank 

of  Cincinnati,  Ohio,  the  right  to 
use  original  charter  No.  20. 

803.  Special  acts  authorizing  change  of 

name    or    location    of    national 
banks. 


NATIONAL  BANKING  LAWS  APPLICABLE  TO  PORTO  RICO. 
ACT  APRIL  12,  1900. 

800.  Sec.  14.— That  the  statutory  laws  of  the  United  ,  .*?*.^,?V?'}T' 

~  ,,.       .  1-11  I'll"  ^^^  14;  31  btat.L., 

btates  not  locally  inapplicable,  except  as  hereinbefore  or  sa 
hereinafter  otherwise  provided,  shall  have  the  same  force 
and  effect  in  Porto  Rico  as  in  the  United  States,  except 
the  internal-revenue  laws,  which,  in  view  of  the  pro- 
%asions  of  section  3,  shaU  not  have  force  and  effect  in 
Porto   Rico. 

Note. — The  Attorney  General  of  the  United  States  in  an  opinion 
rendered  June  2,  1900,  held  "There  seems  to  be  in  the  structure  of  the 
national  banking  laws  no  general  provisions  which  can  not  be  carried 
into  force  and  effect  in  Porto  Rico  equally  with  all  of  the  various  States 
and  Territories  to  which  the  laws  were  originally  applied.  I  can  find 
no  reason  to  hold  that  the  statutes  relative  to  the  organization  and  pow- 
ers of  national  banks  have  not,  by  section  14  of  the  Porto  Rican  act, 
above  referred  to,  been  extended  to  that  island.  The  language  of  that 
section  is  broad  enough,  and  in  my  opinion  does  authorize  the  organ- 
ization and  carrying  on  of  national  banks  in  Porto  Rico." 

NATIONAL    BANKING    LAWS    APPLICABLE    TO    HAWAII. 
ACT  APRIL  30,  1900. 


as 


801.  Sec.  5. — That  the  Constitution,  and  except 
herein  otherwise  provided,  all  the  laws  of  the 
States  which  are  not  locally  inapplicable,  shall  have  the 
same  force  and  effect  within  the  said  Territory  as  else- 
where in  the  United  States:  Provided,  That  sections 
eighteen  hundred  and  fifty  and  eighteen  himdrcd  and 
ninety  of  the  Revised  Statutes  of  the  United  States  shall 
not  apply  to  the  Territory  of  Hawaii. 

Note. — The  Attorney  General  of  the  United  States  in  an  opinion 
rendered  June  23,  1900,  held  "That  the  act  of  April  30,  1900,  *  *  ♦ 
extended  the  national  banking  acta  to  the  Territory  of  Hawaii,  and 
would  authorize  the  Comptroller  to  grant  permission  for  the  organiza- 
tion of  national  banks  therein.  (See  my  opinion  of  June  2,  1900,  rela- 
tive to  the  same  question  as  applied  to  Porto  Rico.)  But  I  do  not  think 
that  the  provisions  of  section  5154  apply  to  banks  existing  in  Hawaii 
prior  to  the  passage  of  the  act  of  April  30,  1900.  Sections  5154  and  5155 
seem,  by  their  especial  terms,  to  refer  only  to  banking  institutions  organ- 
ized under  special  or  general  laws  of  a  State,  and  do  not  seem  to  apply  at 
all  to  banks  organized  under  the  laws  of  any  Territory.  I  tliink  the 
object  of  these  two  sections  was  to  enable  the  banks  that  wore  previously 
stnctly  State  institutions  to  become  national  corporations,  and  the 
operation  of  the  act  in  that  respect  is  to  be  so  restricted." 


Act 


1900 

United  stat  l.,  wi 


Apr, 
sec.  5 


80. 
31 


207 


208  SPECIAL    ACTS. 

GRANTING  FIFTH-THIRD  NATIONAL  BANK,  OF  CINCIN- 
NATI, OHIO,  THE  RIGHT  TO  USE  ORIGINAL  CHARTER 
NUMBER  TWENTY. 

802.  Be  it  eiuicted  hy  the  Senate  and  House  of  Repre- 
sentatives of  the    United  States  of  America  in   Congress 
i9w°*37  Stat  if'  ^semhled,  That  the  Comptroller  of  the  Currency  be,  and 
13781  "'  he  is  hereby,  authorized  and  directed  to  issue  to  the  Fifth- 

Third  National  Bank,  of  Cincinnati,  Ohio,  charter  num- 
bered twenty  in  lieu  of  their  present  charter  numbered 
twenty-seven  hundred  and  ninety-eight,  said  charter 
numbered  twenty  being  the  original  charter  number  of 
the  Third  National  Bank,  of  Cincinnati,  Ohio,  which  bank, 
was  merged  and  consolidated  with  the  Fifth  National 
Bank,  of  Cincinnati,  Ohio,  in  the  year  nineteen  hundred 
and  eight,  under  the  name  of  the  Fifth-Third  National 
Bank,  of  Cincinnati,  Ohio,  said  consolidated  bank  having 
succeeded  to  all  the  assets,  good  will,  rights,  privileges, 
and  emoluments  of  the  said  Third  National  Bank,  of 
Cincinnati,  Ohio. 

SPECIAL  ACTS  AUTHORIZING  CHANGE  OF  NAME  OR 
LOCATION.     ACT  JUNE  7,  1872. 

isra^'S/n  \7  803-  Sec.  1.— That  the  First  National  Bank  of  An- 
stat.  L.,281.'  napolis,  now  located  in  the  city  of  Annapolis  and  State 
of  Maryland,  is  hereby  authorized  to  change  its  location 
to  the  city  of  Baltimore,  in  said  State.  Whenever  the 
stockholders  representing  three-fourths  of  the  capital 
of  said  bank,  at  a  meeting  called  for  that  purpose,  deter- 
mine to  make  such  change,  the  president  and  cashier  shall 
execute  a  certificate,  under  the  corporate  seal  of  the  bank, 
specifying  such  determination,  and  shall  cause  the  same 
to  be  recorded  in  the  office  of  the  Comptroller  of  the  Cur- 
rency, and  thereupon  such  change  of  location  shall  be 
effected,  and  the  operations  of  discount  and  deposit  of 
said  bank  shall  be  carried  on  in  the  city  of  Baltimore. 

Sec.  2.  That  nothing  in  this  act  contained  shall  be  so 

construed  as  in  any  manner  to  release  the  said  bank  from 

any  liability  or  affect  any  action  or  proceeding  in  law  in 

which  the  said  bank  may  be  a  party  or  interested.     And 

when  such  change  shall  have  been  determined  upon,  as 

aforesaid,  notice   thereof   and   of  such  change  shall  be 

pubhshed  in  two  weekly  papers  in  the  city  of  Annapolis 

not  less  than  four  weeks. 

im^sec^l  h      ^^^'  ^-  That  whenever  the  location  of  said  bank  shall 

Stat.  L.,  282. '       havc  bccu  changed  from  the  city  of  Annapolis  to  the  city 

of  Baltimore,  in  accordance  with  the  first  section  of  this 

act,  its  name  shall  be  changed  to  The  Traders'  National 

Bank  of  Baltimore,  if  the  board  of  directors  of  said  bank 

shall  accept  the  new  name  by  resolution  of  the  board, 

and  cause  a  copy  of  such  resolution,  duly  authenticated, 

to  be  filed  with  the  comptroller  of  the  currency. 

i872°*sec'^4*   \i      ^^^-  ^-  That  all  the  debts,  demands,  liabilities,  rights, 

Stat.  L.,  282.        privileges,   and  powers  of    the  First  National  Bank  of 

Annapolis   shall   devolve   upon    the   Traders'    National 


Act     June 

7, 

1872,    sec.    2; 

17 

Stat.  L.,  282. 

SPECIAL  ACTS.  209 

Bank  of  Baltimore  whenever  such  change  of  name  is 
effected. 

Sec.  5.  That  this  act  shall  take  effect  and  be  in  force  ig^^^seJl^s;  \i 
from  and  after  its  passage.  ptat.  l.tsz' 

Note. — Acta  of  a  similar  nature  to  the  one  preceding  have  been 
enacted  by  Congress  for  the  following  purposes: 

Authorizing  The  Manufacturers'  Isational  Bank  of  New  York  to 
change  its  location  from  the  city  of  New  York  to  the  city  of  Brooklyn. 
(Approved  July  27,  1868.) 

Authorizing  The  City  National  Bank  of  New  Orleans,  Louisiana,  to 
change  its  name  to  The  Germania  National  Bank  of  New  Orleans 
(Approved  March  1,  1869.) 

Authorizing  The  Second  National  Bank  of  Plattsburgh,  New  York, 
to  change  its  name  to  The  Vilas  National  Bank  of  Plattsburgh. 
(Approved  March  1,  1869.) 

Authorizing  The  First  National  Bank  of  Delhi,  New  York,  to  change 
its  location  and  name  to  The  First  National  Bank  of  Port  Jervis,  New 
York.     (Approved  May  5,  1870.) 

Authorizing  The  First  National  Bank  of  Fort  Smith,  Arkansas,  to 
change  its  location  and  name  to  the  First  National  Bank  of  Camden, 
Arkansas.     (Approved  July  1,  1870.) 

Authorizing  the  Jersey  Shore  National  Bank,  Pennsjivania,  to 
change  its  location  and  name  to  The  Williamsport  National  Bank, 
Pennsylvania.     (Approved  December  22,  1870.) 

Authorizing  the  Worcester  County  National  Bank  of  Blackstone, 
Massachusetts,  to  change  its  location  and  name  to  The  Franklin 
National  Bank,  Massachusetts.     (Approved  February-  9,  1871.) 

Authorizing  The  Farmers'  National  Bank  of  Fort  Edward,  New  York, 
to  change  its  location  and  name  to  The  North  Granville  National  Bank, 
New  York.     (Approved  February- 18.  1871.) 

Authorizing  The  Worthington"  National  Bank  of  Cooperstown,  New 
York,  to  change  its  location  and  name  to  The  First  National  Bank  of 
Oneonta,  New  York.     (Approved  February  27,  1871.) 

Authorizing  The  Warren  National  Bank  of  South  Danvers,  Massa- 
chusetts, to  change  its  name  to  The  Warren  National  Bank  of  Peabody, 
Massachusetts.     (Approved  March  12,  1872.) 

Authorizing  The  First  National  Bank  of  Seneca.  Illinois,  to  change  its 
location  and  name  to  The  First  National  Bank  of  Morris,  Illinois. 
(Tw^o  acta,  approved  April  5,  1872,  and  June  18,  1874.) 

Authorizing  The  Railroad  National  Bank  of  Lowell.  Massachusetts, 
to  change  its  location  and  name  to  The  Railroad  National  Bank  of 
Boston,  Massachusetts.    (Approved  May  31,  1872.) 

Authorizing  The  National  Bank  of  Lyons,  Michigan,  to  change  its 
location  and  name  to  The  Second  National  Bank  of  Ionia,  Michigan. 
(Approved  December  24,  1872.) 

Authorizing  The  East  Chester  National  Bank  of  Mount  Vernon,  New 
York,  to  change  its  location  and  name  to  The  German  National  Bank 
of  Evans%'ille,  Indiana.     (Approved  January  11,  1873.) 

Authorizing  The  First  National  Bank  of  Newnan,  Georgia,  to  change 
ita  location  and  name  to  The  National  Bank  of  Commerce,  Atlanta, 
Georgia.     (Approved  January- 23,  1873.) 

Authorizing  The  First  National  Bank  of  Watkins,  New  York,  to 
change  its  location  and  name  to  The  First  National  Bank  of  Penn  Van, 
New  York.     (Approved  February  19,  1873.) 

Authorizing  The  National  Bank  of  Springfield,  Missouri,  to  change 
itfl  name  to  The  First  National  Bank  of  Springfield  Missouri.  (Ap- 
proved March  3,  1873.) 

Authorizing  The  Kansas  Valley  National  Bank  of  Topeka,  Kansas, 
to  change  ita  name  to  The  First  National  Bank  of  Topeka,  Kansas. 
(Approved  March  3,  1873.) 

Authorizing  The  First  National  Bank  of  Saint  Anthony,  Minnesota, 
to  change  its  location  and  name  to  The  Merchants'  National  Bank  oi 
MinncapoUe,  Minnesota.     (Approved  January  S,  1874.) 

Authorizing  The  Second  National  Bank  of  Havana,  Xew  York,  to 
change  its  name  to  The  Havana  National  Bank  of  Havana,  New  York. 
(Approved  January  9,  1874.) 

164312"— 20 14 


210  SPECIAL  ACTS. 

Authorizing  The  Passaic  CouBty  National  Bank  of  Patereon,  New 
Jersey,  to  change  ita  name  to  The  Second  National  Bank  of  Patereon, 
New  Jereey.     (Approved  April  15,  1874.) 

Authorizing  The  Citizens'  National  Bank  of  Hagerstown,  Maryland, 
to  change  its  location  and  name  to  The  Citizens'  National  Bank  of 
Washington  City,  District  of  Columbia.     (Approved  May  1,  1874.) 

Authorizing  The  Irasburg  National  Bank  of  Orleans,  at  Irasburg, 
Vermont,  to  change  its  location  and  name  to  The  Barton  National  Bank, 
Vermont.    (Approved  June  3,  1874.) 

Authorizing  The  Farmers'  National  Bank  of  Greensburg,  Pennsyl- 
vania, to  change  its  location  and  name  to  The  Fifth  National  Bank  of 
Pittsburg,  Pennsylvania.     (Approved  June  23,  1874.) 

Authorizing  The  Citizens'  National  Bank  of  Sanbomton,  New  Hamp- 
shire, to  change  its  name  to  The  Citizens'  National  Bank  of  Tilton,  New 
Hampshire.     (Approved  February  19,  1875.) 

Authorizing  the  Second  National  Bank  of  Jamestown,  New  York,  to 
change  its  name  to  The  City  National  Bank  of  Jamestown,  New  York. 
(Approved  March  3,  1875.) 

Authorizing  The  Second  National  Bank  of  Watkins,  New  York,  to 
change  its  name  to  The  Watkins  National  Bank,  New  York.  (Ap- 
proved March  3,  1875.) 

Authorizing  The  Slater  National  Bank  of  North  Providence,  Rhode 
Island,  to  change  its  name  to  The  Slater  National  Bank  of  Pawtucket, 
Rhode  Island.     (Approved  March  3,  1875.) 

Authorizing  The  Auburn  City  National  Bank  of  Auburn,  New  York, 
to  be  consolidated  with  The  First  National  Bank  of  Aubiun,  New  York. 
(Approved  March  3,  1875.) 

Authorizing  The  Miners'  National  Bank  of  Braidwood,  lUinois,  to 
change  its  location  and  name  to  The  Commercial  National  Bank  of  Wil- 
mington, Illinois.     (Approved  January  31,  1878.) 

Authorizing  The  Windham  National  Bank,  Windham,  Connecticut, 
to  change  its  location  to  the  village  of  WiUimantic,  Connecticut. 
(Approved  February  10,  1879.) 

Authorizing  the  National  Bank  of  Commerce  of  Cincinnati,  Ohio,  to 
change  its  name  to  The  National  Lafayette  and  Bank  of  Commerce. 
(Approved  April  29,   1879.) 

Authorizing  the  City  National  Bank  of  Manchester,  New  Hampshire, 
to  change  its  name  to  The  Merchants'  National  Bank  of  Manchester. 
(Approved  June  11,  1880.) 

Authorizing  The  Blue  Hill  National  Bank  of  Dorchester,  Massachu- 
eetts,  to  change  its  location  and  name  to  the  Blue  Hill  National  Bank  of 
Milton,  Massachusetts.     (Approved  January  13,  1881.) 

Authorizing  The  First  National  Bank  of  Meriden,  West  Meriden, 
Connecticut,  to  change  its  name  to  The  First  National  Bank  of  Meriden, 
Connecticut.    (Approved  March  1,  1881.) 

Authorizing  The  National  Mechanics'  Banking  Association  of  New 
York,  New  York,  to  change  its  name  to  Wail  Street  National  Bank. 
(Approved  February  14,  1882.) 

Authorizing  The  Lancaster  National  Bank  of  Lancaster,  Massachu- 
setts, to  change  its  location  and  name  to  The  Lancaster  National  Bank 
of  Clinton,  Massachusetts.     (Approved  February  25,  1882.) 

Authorizing  the  National  Bank  of  Kutztown,  Pennsylvania,  to 
change  its  location  and  name  to  The  Keystone  National  Bank  of 
Reading,  Pennsylvania.     (Approved  June  27,  1882.) 

Joint  resolution  authorizing  The  National  Bank  of  Winterset,  Iowa, 
to  change  its  name  to  The  First  National  Bank  of  Winterset,  Iowa. 
(Approved  January  18,  1883.) 

Authorizing  The  Second  National  Bank  of  Xenia,  Ohio,  to  increase 
its  capital  stock.     (Approved  February  17,  1883.) 

Authorizing  The  First  National  Bank  of  West  Greenville,  Pennsyl- 
vania, to  change  its  name  to  The  First  National  Bank  of  Greenville, 
Pennsylvania.     (Approved  February  26,  1883.) 

Authorizing  The  West  Waterville  National  Bank  of  Oakland,  Maine, 
to  change  its  title  to  The  Messalonskee  National  Bank  of  Oakland, 
Maine.     (Approved  April  15,  1884.) 

Authorizing  the  Hillsborough  National  Bank,  of  Hillsboro,  Ohio,  to 
change  its  name  to  The  First  National  Bank  of  Hillsborough,  Ohio. 
(Approved  December  18,  1884.) 


SPECIAL   ACTS.  211 

Authorizing  The  Slater  National  Bank  of  North  Providence,  Rhode 
Island,  to  change  ita  name.     (Approved  January  8,  1885.) 

Authorizing  tne  First  National  Bank  of  Omaha,  Nebraska,  to  increase 
its  capital  stock.     (Approved  January  10,   1885.) 

Authorizing  The  National  Bank  of  Bloomington,  Illinois,  to  change 
its  name  to  the  First  National  Bank  of  Bloomington,  Illinois.  (Ap- 
proved January  27,  1885.) 

Authorizing  The  Manufacturers'  National  Bank  of  New  York  to 
change  its  name  to  The  Manufacturers'  National  Bank  of  Brooklyn, 
New  York.     (Approved  February  20,  1885.) 

Authorizing  The  Commercial  National  Bank  of  Chicago,  Illinois,  to 
increase  its  capital  stock.     (Approved  February  28,  1885.) 

Authorizing  The  First  National  Bank  of  Lamed,  Kansas,  to  increase 
ita  capital  stock.     (Approved   March  3,    1885.) 

Authorizing  The  First  National  Bank  of  Fort  Benton,  Montana,  to 
change  its  location  and  name.     (Approved  December  18,  1890.) 

Authorizing  the  National  Safe  Deposit  Company  of  Washington  to 
change  its  title  to  The  National  Safe  Deposit,  Savings  and  Triwt  Com- 
pany of  the  District  of  Columbia.     (Approved  February  18,  1892.) 

Authorizing  a  national   bank  of  Clucago,   Illinois,   to  establish  a 
branch  office  upon  the  grounds  of  the  World's  Columbian  Exposition. 
(Approved  May  12,  1892.) 

Authorizing  The  First  National  Bank  of  Sprague,  Washington,  to 
change  Its  location  and  name.     (Approved  March  20,  1896.) 

Authorizing  the  Interstate  National  Bank  of  Kansas  City,  Kansas,  to 
change  its  location.     (Approved  March  2,  1897.) 

Authorizing  any  bank  or  trust  company  located  in  the  State  of  Mis- 
souri to  conduct  a  banking  office  on  the  Louisiana  Exposition  grounds 
at  St.  Louis,  Mo.     (Approved  March  3,  1901.) 

Authorizing  The  American  National  Bank  of  Graham,  Virginia,  to 
change  its  location  and  name.     (Approved  February  15,  1906.) 

Authorizing  the  National  Safe  Deposit  Savings  and  Trust  Company 
of  the  District  of  Columbia  to  change  its  title  to  National  Savings  and 
Trust  Company,     (Approved  January  31,  1907.) 


212  SPECIAL  ACTS. 


OPINIONS  OF  THE  ATTORNEY  GENERAL. 


213 


CHAPTER  IX. 


OPINIONS  OF  THE  ATTORNEY   GENERAL  ON   GUARANTY  LAWS   OF  OKLA- 
HOMA AND   KANSAS,   AND  ON  THE   INSURANCE  OF  BANK  DEPOSIfS. 


903.  Opinion  of  Attorney  General  of 
United  States  on  power  of  a 
national  bank  to  make  a  con- 
tract with  an  insurance  com- 
pany by  which  the  company 
insures  and  guarantees  each 
depositor  in  the  bank  the  full 
payment  of  his  deposit  therein. 


900.  Opinion    of    Attorney    General    of 

United  States  on  Oklahoma 
deposit  guaranty  law. 

901.  Opinion    of    Attorney    General    of 

United  States  on  Kansas  de- 
posit guaranty  law. 

902.  Opinion    of    Attorney    General    of 

the  United  States  on  power  of 
a  national  bank  to  enter  into  a 
contract  with  an  insurance  com- 
pany guaranteeing  the  solvency 
of  the  bank. 

THE  OKLAHOMA  DEPOSIT  GUARANTY  LAW. 

900.  The  Attorney  General  of  the  United  States,  in  an 
opinion  rendered  July  28,  1908,  said: 

The  business  of  insuring  deposits  is  a  wholly  separate  business  from 
that  of  banking  *  *  *.  A  national  bank  has  no  power  to  guarantee 
the  obligations  of  a  third  party,  unless  in  connection  with  the  sale  or 
transfer  of  its  own  property  and  as  an  incident  to  the  business  of  the 
bank    *    *    *. 

But  a  contract  guaranteeing  the  payment  by  another  corporation  or 
individual  of  obligations  in  nowise  connected  with  the  business  of  the 
bank  is  entirely  ultra  \dres.  I  hold  *  *  *  that  it  is  illegal  for  the 
officers  of  a  national  bank  to  enter  into  any  such  agreement  as  that  con- 
templated by  section  4  of  the  Oklahoma  statutes,  and  any  willful  action 
to  this  effect  on  the  part  of  any  national  bank  is  sufficient  cause  for  the 
forfeiture  of  charter. 

THE  KANSAS  DEPOSIT  GUARANTY  LAW. 

901.  The  Attorney  General  of  the  United  States,  in  an 
opinion  rendered  April  6,  1909,  said: 

The  question  of  the  power  of  a  national  bank  to  avail  of  the  invita- 
tion extended  to  it  by  this  act  involves  primarily  a  consideration  of 
the  nature  of  the  agreement  contemplated  by  it.  Attorney  General 
Bonaparte,  in  an  opinion  rendered  to  the  Secretary  of  the  Treasury, 
under  date  of  July  28,  1908,  considering  an  act  of  the  Legislature  of 
the  State  of  Oklahoma  (27  Op.  A.  G.,  p.  38),  determined  that  a  national 
bank  could  not  lawfully  enter  into  the  plan  or  scheme  contemplated 
by  that  act,  because  it  involved  essentially  a  guaranty  to  the  depositors 
of  all  State  banks  in  Oklahoma,  and  other  national  banks  in  that  State 
which  might  accept  the  terms  of  the  law,  that  their  respective  depos- 
itors should  be  paid  in  full;  a  contract  which  he  deemed  to  be  clearly 
ultra  vires. 

The  act  now  under  consideration  attempts  to  avoid  this  objection 
by  limiting  the  amount  for  which  any  bank  may  become  liable,  but 
within  such  limitation  the  same  principle  is  involved,  for  to  the  extent 
of  the  contribution  and  liability  required  by  the  statute  each  bank 
becomes  liable  to  creditors  of  the  other  banks  which  are  parties  to  the 
plan.  But  even  if  a  proper  construction  of  the  act  would,  as  contended, 
make  it  a  guaranty  by  each  bank  of  payments  to  its  own  depositors,  and 
not  a  general  guaranty  within  the  limits  of  contribution  prescribed  by 
the  act,  of  all  deposits  in  all  the  banks  which  are  parties  to  the  scheine, 
nevertheless  I  am  strongly  of  the  opinion  that  a  national  bank  is  %vith- 
out  corporate  power  to  expend  its  moneys  for  the  purpose  of  providing 
insurance  that  its  depositors  shall  be  paid  in  full.  It  may,  of  courste, 
insure  its  own  property  against  loss  or  destruction;  it  mav  insure  itself 
against  loss  of  property  through  theft  or  other  dishonesty,  but  the  appli- 


215 


216  OPINIONS   OF    THE   ATTORNEY   GENERAL. 

cation  of  its  funds  for  the  purpose  of  securing  a  collateral  guaranty  by 
third  parties  that  it  will  pay  in  full  its  debts  to  its  depositors  is,  it 
appears  to  me,  beyond  its  corporate  power. 

Such  contract  would  fall  within  the  principles  asserted  in  Commer- 
cial National  Bank  v.  Pine  (82  Fed.,  799),  Bowen  v.  Needles  National 
Bank  (94  Fed.,  925),  for  if,  as  is  well  established,  a  national  bank  has  no 
power  to  guarantee  the  obligation  of  another,  it  certainly  has  no  power 
to  employ  another  to  guarantee  its  own  obligation  to  a  third  person. 

POWER  OP  NATIONAL  BANK  TO  ENTER  INTO  A  CONTRACT 
WITH  AN  INSURANCE  COMPANY  GUARANTEEING  THE 
SOLVENCY  OF  THE  BANK. 

902.  The  Attorney  General  of  the  United  States,  in  an 
opinion  rendered  May  7,  1909,  said: 

Replying  to  yours  of  the  29th  ultimo,  in  which,  at  the  request  of  the 
Comptroller  of  the  Currency,  you  ask  for  an  opinion  as  to  the  power  of 
a  national  bank  to  enter  into  a  contract  with  an  insurance  company 
guaranteeing  the  solvency  of  the  bank,  and  transmitting  to  me  a  form 
of  policy  which  is  proposed  to  be  issued  by  an  insurance  company  pro- 
posed to  be  organized,  I  beg  to  say  that,  as  a  general  principle,  I  have 
no  doubt  that  it  is  entirely  within  the  powers  of  a  national  bank  to 
contract  for  the  insurance  of  its  assets  against  loss.  The  form  of  the 
proposed  policy  submitted  in  your  letter  is  somewhat  peculiar.  It 
purports  to  insure  to  the  bank  the  payment  of  "a  sum  of  money  suffi- 
cient to  indemnify  the  bank  for  any  and  all  losses  suffered  by  it  by 
reason  of  theft,  embezzlement,  losses  in  realizing  upon  loans  and  in- 
vestments, shrinkage  in  value  of  assets  or  otherwise,  in  an  amount 
equal  to  but  not  exceeding  the  net  excess  of  its  obligations,  other  than 
by  reason  of  the  stock  of  the  bank,  over  the  total  aggregate  value  of  the 
assets  of  the  bank  thus  reduced  by  such  losses;  provided  that  there 
shall  be  included  in  the  assets  of  the  bank  all  net  sums  which  have 
been  realized  by  reason  of  the  additional  liability  of  the  stockholders 
of  the  bank." 

Such  contract  is,  in  effect,  an  agreement  to  pay  to  the  bank  any  defi- 
ciency in  its  assets  upon  ultimate  realization  necessary  to  enable  it  to 
pay  all  of  its  liabilities  of  every  kind.  The  policy  is  to  run  for  a  period 
of  three  months,  but  to  be  renewable  thereafter  for  periods  of  three 
months  each  with  the  consent  of  the  insurance  company,  and  at  such 
premiums  as  the  insurance  company  may  fix  at  least  one  month  before 
the  expiration  of  the  then  current  term  of  the  insurance,  the  premium 
in  every  case  to  be  a  pereentage  of  the  average  indebtedness  of  the  bank 
during  the  period  covered  by  such  renewal,  with  the  provision  that,  if 
Buch  rate  snail  be  in  excess  of  one-sixteenth  of  1  per  cent  upon  such 
average  indebtedness,  then  and  in  such  event  the  insurance  company 
shall  be  liable  to  account  to  the  bank  for  the  application  of  such  pre- 
mium paid  by  the  bank  in  excess  of  one-sixteenth  of  1  per  cent, ' '  which 
excess  shall  be  applicable  only  to  the  payment  of  actual  losses  incurred 
by  the  company  by  reason  of  claims  under  this  and  similar  policies,  and 
any  excess  over  such  extra  claims  shall  be  divided  pro  rata  among  the 
banks  paying  such  extra  rate  of  premium  as  a  participation  in  the  prof- 
its during  which  period  such  extra  rate  of  premium  has  been  paid." 

It  is  somewhat  uncertain  precisely  what  this  paragraph  means  and 
what  its  effect  may  be.  It  seems  to  me  to  be  objectionable  as  com- 
mitting the  bank  to  a  profit-sharing  feature,  which  might  be  contended 
to  entail  a  corresponcung  liability  for  losses;  and,  as  the  attorney  for 
the  promoters  of  the  proposed  insurance  company  informs  me  that  this 
is  not  regarded  as  an  essential  part  of  the  plan,  I  should  advise  that  it 
had  better  be  eliminated  from  the  policy. 

Another  provision  contained  in  the  policy  subjects  the  bank  to  a 
periodical  examination  by  the  examiners  of  the  insurance  company 
without  notice  and  at  such  times  as  the  company  may  elect,  one  of 
such  examinations  to  be  within  each  period  of  six  months  covered  by 
the  policy  and  all  renewals  thereof.  This  period  is  probably  inadver- 
tently placed  at  six  months,  as  the  policy  is  proposed  to  be  written  for 
periods  of  three  months  only.  Aside  from  that,  I  very  much  question 
the  legality  of  this  clause,  or  at  least  its  enforceability.  Section  5241 
of  the  Revised  Statutes  provides  that,  "No  association  shall  be  subject 


OPINIONS   OF   THE   ATTORNEY   GENERAJ..  2] 

to  any  visitorial  powers  other  than  such  as  are  authorized  by  this  title, 
or  are  vested  in  the  courts  of  justice." 

WTiile  this  statute  does  not  prohibit  the  bank  from  permitting  an 
examination  of  its  books,  in  my  opinion  it  does  operate  to  prohibit  it 
from  obligating  itself  to  permit  sucn  examination;  and  if  the  covenant 
to  insiire  can  be  considered  as  in  any  respect  dependent  upon  thia 
agreement  to  permit  examinations,  it  might  be  vitiated  by  the  unlaw- 
ful pro\ision.  I  should  advise  that  the  clause  be  reframed  so  as  to 
make  it  clear  that  the  agreement  to  insure  is  not  dependent  upon  the 
failure  to  permit  the  examination,  although  it  might  be  stipulated  that 
in  case,  at  any  time,  the  examiner  of  the  company  should  not  be 
allowed  access  to  the  books  of  the  bank  for  the  purpose  of  making  an 
examination  the  company  should  have  the  option,  upon  reasonable 
notice,  to  terminate  the  contract. 

In  my  opinion,  therefore,  it  is  a  matter  for  the  discretion  of  the 
directors  and  officers  of  a  bank  to  determine  whether  or  not  they  will 
enter  into  any  such  contract  in  any  given  instance,  this  discretion  to 
be  exercised  in  \dew  of  the  solvency  and  general  financial  condition  of 
the  company  making  the  insurance  and  the  reasonableness  of  the  rate 
of  premium;  and  the  form  of  the  policy  being  modified  to  conform  to 
the  foregoing  suggestions,  I  see  no  legal  reason  why  a  bank  may  not 
enter  into  it. 

POWER  OF  A  NATIONAL  BANK  TO  MAKE  A  CONTRACT 
WITH  AN  INSURANCE  COMPANY  BY  WHICH  THE  COM- 
PANY INSURES  AND  GUARANTEES  EACH  DEPOSITOR 
IN  THE  BANK  THE  FULL  PAYMENT  OF  HIS  DEPOSIT 
THEREIN. 

903.  The  Attorney  General  of  the  United  States,  in  an 
opinion  rendered  March  31,  1915,  said: 

I  have  the  honor  to  acknowledge  the  receipt  of  your  letter  of  Feb- 
ruary 12,  1915,  inclosing  letter  of  the  Comptroller  of  the  Currency, 
opinion  of  the  Acting  Solicitor  of  the  Treasury,  and  brief  filed  with 
the  Comptroller  on  behalf  of  a  guaranty  company  and  certain  national 
banks,  in  which  the  question  is  raised  as  to  whether  a  national  bank 
may  enter  into  a  contract  with  a  guaranty  company  under  which,  in 
consideration  of  premiums  paid  by  the  bank,  the  company  "insures 
and  guarantees  each  depositor  in  the  bank  the  full  pa\Tnent  of  his  de- 
posit therein."     You  ask  my  opinion  upon  this  question. 

In  my  opinion,  it  is  within  the  power  of  a  national  bank  to  enter  into 
such  a  contract. 

The  law  confers  upon  national  banks  such  incidental  powers  as  are 
required  to  meet  all  legitimate  demands  of  the  banking  business,  and 
to  enable  them  to  conduct  their  affairs  safely  and  prudently  within  the 
scope  of  their  charters.  Section  5136,  Revised  Statutes;  First  National 
Bank  v.  National  Exchange  Bank  (92  U.  S.  122,  127).  The  power  to 
give  security  for  deposits  seems  to  be  recognized  by  section  5153, 
Kevised  Statutes,  as  among  these  incidental  powers.  The  section  last 
mentioned,  after  pro\iding  that  all  associations  created  under  the  act, 
shall,  when  so  designated  by  the  Secretary  of  the  Treasury,  be  deposi- 
taries, further  provides  that  "The  Secretary  of  the  Treasury  shall  re- 
auire  the  associations  thus  designated  to  give  satisfactory  security,  by 
tne  deposit  of  United  States  bonds  and  otherwise,  for  the  safe  keeping 
and  prompt  payment  of  the  public  money  deposited  with  them,"  etc. 
It  is  believed  that  this  section  is  more  reasonably  construed  as  a  recog- 
nition of  the  existence  of  the  power  on  the  part  of  national  banks  to 
give  security  for  deposits  than  as  a  grant  by  implication  of  authority  to 
give  security  for  Government  deposits  alone. 

The  power  of  banks  to  give  security  for  deposits  or  for  pa>Tnent  of 
their  debts  has  been  frequently  recognized.  It  has  been  held  that  the 
property  of  a  bank  may  oe  pledged  as  security  for  a  debt  (  United  Staffs 
v.  Robertson  (1831),  5  Pet.,  641,  650);  that  a  bond  with  sureties  may  be 
given  to  prevent  depositors  from  withdrawing  their  accounts  {Wylit  v. 
Commercxal  A:  Farmers'  Bank  (1902),  41  S.  E.,  504,  509;  63  S.  C,  406): 
and  that  a  national  bank  may  give  its  bond  with  sureties  to  secure  a 
depoedt  of  State  funds  {State  of  Nebraska  v.  First  National  Bank  of 
OrUam  (1898),  88  Fed.,  947,  951). 


218  OPINIONS   OF   THE   ATTORNEY   GENERAL. 

The  power  to  contract  for  guaranteeing  or  securing  depositors  arises 
from  the  nature  of  the  relation  existing  between  the  banks  and  their 
depositors.  The  relation  created  between  the  bank  and  a  depositor  by 
the  receipt  of  deposits  is  that  of  debtor  and  creditor.  (National  Bank 
V.  Millard  (1869),  10  Wall.,  152,  155;  Davis  v.  Elmira  Savings  Bank 
(1896),  161  U.  S.,  275,  288.)  The  power  to  receive  deposits,  expressly 
granted  to  every  national  bank  (sec.  5136,  R.  S.),  is,  of  course,  indis- 
pensible  to  the  conduct  of  the  business  of  banking;  and  the  extent  of 
its  exercise  is  in  a  degree  the  measxu'e  of  the  success  of  the  bank.  The 
ability  of  a  bank  to  obtain  deposits  largely  depends  upon  the  confidence 
of  depositors,  or  the  belief  that  their  deposits  are  secure.  Loss  of  such 
confidence  on  the  part  of  depositors  is  usually  attended  with  loss  and 
inconvenience  to  them,  to  the  bank,  and  to  the  public.  The  law  ac- 
cordingly imposes  upon  the  bank  an  imperative  duty  not  only  to  repay 
deposits  but  to  keep  them  secure.  For  the  protection  of  depositors,  its 
revenues  and  property  are  pledged,  its  stockholders  are  made  subject 
to  a  double  liability,  and  its  directors  may  be  held  liable  for  a  viola- 
tion of  their  duties. 

The  means  by  which  depositors  are  to  be  protected  and  secured  are 
not  expressly  limited  or  restricted  by  statute.  A  large  discretion  is  left 
to  the  officers  and  directors.  They  may  use  such  means  for  the  purpose 
as  are  not  prohibited  by  or  inconsistent  with  the  provisions  of  the  law 
and  as  they  may  reasonably  find  to  be  suitable  and  proper  and  not  incon- 
sistent with  the  prudent  conduct  of  the  affairs  of  the  bank  within  the 
scope  of  its  charter.  "Whatever  protects  the  depositors,"  it  has  been 
said,  "protects  the  bank,  because  it  assures  confidence  in  the  bank.'- 
(JVoble  State  Bank  v.  Haskell  (1908),  22  Okla.,  48,  89.) 

A  contract  of  insurance  or  guaranty,  such  as  described  in  the  ques- 
tion submitted,  may  afford  protection  to  depositors  by  securing  the  per- 
formance of  an  obligation  on  the  part  of  the  bank  which  otherwise 
might  not  be  performed.  And  it  is  not  unreasonable  to  believe  that 
Buch  a  contract,  at  the  same  time,  may  prove  valuable  to  the  bank  be- 
caxise  of  the  confidence  it  may  assure.  No  reason  is  perceived  for  pro- 
hibiting a  national  bank,  in  the  discretion  of  its  directors,  from  so  se- 
curing its  depositors,  or  for  denying  to  the  bank  such  benefits  as  they 
believe  may  accrue  in  the  form  of  increased  confidence  resulting  from 
Buch  a  contract. 

Opinions  of  former  Attorneys  General,  dated,  respectively,  July  28, 
1908  (27  Op.,  37),  and  April  6,  1909  (27  Op.,  272),  are  referred  to  in  the 
inclosures  as  having  been  construed  by  the  Comptroller  of  the  Ciirrency 
as  holding  that  national  banks  are  without  authority  to  pay,  as  part  of 
their  legitimate  expenses,  premiums  on  policies  insuring  their  deposi- 
tors against  loss. 

As  I  view  these  opinions,  the  conclusion  in  neither  of  them  is  incon- 
Bifltent  with  the  conclusion  reached  herein.  The  opinion  of  July  28, 
1908,  construing  the  Oklahoma  State  banking  act,  determined  that  a 
national  bank  could  not  lawfully  participate  in  the  plan  contemplated 
by  the  act  for  the  guarantee  of  deposits,  because  it  involved  essentially 
a  guarantee  to  the  depositors  of  other  banks  that  they  should  be  paid  in 
full — a  contract  which  was  deemed  beyond  the  powers  of  the  bank  to 
make.  The  opinion  of  April  6,  1909,  held  that  national  banks  in  the 
State  of  Kansas  could  not  avail  themselves  of  the  bank  depositor's 
guaranty  law  of  that  State.  The  inquiry,  upon  the  answer  to  which 
the  decision  rests,  was  whether  an  acceptance  of  the  provisions  of 
the  Kansas  law  "would  so  control  the  conduct  of  the  affairs  of  national 
banks  aa  to  expressly  conflict  with  the  laws  of  the  United  States. ' ' 

As  pointed  out  in  the  opinion  of  the  Solicitor  of  the  Treasury,  the 
more  recent  opinion  of  May  7,  1909  (27  Op.,  324),  in  which  the  form  of 
a  policy  of  insurance  guaranteeing  the  assets  of  a  national  bank  against 
loss  was  approved  provided  certain  suggested  modifications  should  be 
made,  is  more  nearly  in  point  on  the  question  now  under  consideration, 
and  is  in  harmony  with  the  views  herein  expressed. 

The  language  employed  in  the  opinions  of  July  28,  1908,  and  April 
8,  1909,  to  the  effect  that  national  banks  are  without  power  to  contract 
for  insuring  that  depositors  shall  be  paid  in  full,  was  used  in  the  course 
of  argument  merely,  applied  to  a  question  which  it  was  not  necessary 
to  determine,  and  may  be  disregarded  so  far  as  inconsistent  with  this 
opinion. 


INDEX. 


219 


INDEX  TO  NATIONAL-BANK  ACT,  ETC. 

llndcx  to  Federal  reserve  act,  p.  251.1 


A. 

Paragraph. 

Abstract  of  report  of  condition  to  be  included  in  annual  report 110 

Abstraction,  penalty  for 436 

Acceptance  of  drafts  or  bills  of  exchange  by  member  banks  of  Federal  Reserve 

System 206,  207 

Acknowledgment.     (See  Oath.) 

Acknowledgment  of  organization  certificate 203 

Acting  Comptroller  of  the  Currency 103 

Act,  the  national-bank 200 

Acts: 

Of  a  general  nature,  not  included  in  national-bank  act,  affecting  national 

banks 700-770 

Special,  authorizing  change  of  name  or  location  of  national  bank 803 

Additional  Deputy  Comptroller 104 

Administrator,  power  of  national  banks  to  act  as 208 

Administrators,  not  personally  liable 242 

Advertisements  (see  also  Publication,  Printing): 

Imitation  of  circulation  in,  penalty  for 345 

Notice  to  creditors  of  insolvent  banks 516 

Agency,  National  Bank  Redemption,  provisions  for 414,  415 

Agent: 

Association  as  fiscal,  of  Government 243 

Bonds,  examination  by 310 

Central  reser^-e  city 401 

Central  resers^e  city,  additional 401 

Circulation,  to  witness  destruction 339 

Foreign  branches  of  national  banks  as  fiscal,  of  United  States 210 

Insurance,  when  national  bank  may  act  as 209 

Liquidating  bank 522 

Reserve 401  407 

Reserve,  city,  additional  central,  provisions  for 401 

Shareholders,  appointment  and  qualifications  of 522 

Shareholders,  duties  of 522 

Special,  to  examine  bank  failing  to  redeem  notes 508 

"Witnessing  destruction  of  circulation  by 339 

Aggregate  amount  of  circulation  not  limited 332 

Aiding  misdemeanors  of  officers 436 

Alaska,  reserve  requirements,  etc.,  for  national  banks  in 411 

Allotment.     (See  Shares.) 

Allotment  of  United  States  bonds  to  be  purchased  by  Federal  reserve  bank 316 

Amendments: 

Proposed,  to  national -bank  act  to  be  made  in  Comptroller's  report 110 

Restriction  of,  to  articles  of  association 225 

Suggested,  to  improve  sj'stem,  to  appear  in  annual  report 110 

Amount: 

Of  bond  of  Comptroller  of  Currency 102 

Of  bond  of  Deputy  Comptroller  of  Currency 103 

Of  bonds  required  to  be  on  deposit 302,  313 

Of  capital  required 224 

Of  circulation  obtainable 323 

Of  circulation  that  may  be  redeemed  at  one  time,  minimum 414 

Of  dividends  that  may  be  declared 429 

Of  redemption  fund  required 414 

Of  reserve  required  to  be  held  by — 

Banks  elsewhere  than  in  re.serve  city 405 

Central  reserve  city  banks 407 

Country  banks 405 

Reserve  city  banks 406 

221 


222  INDEX   TO   NATIONAL-BANK  ACT,  ETC. 

Amount — Continued.  paragraph. 

Of  tax  on  circulation 444 

Of  United  States  bonds  that  may  be  refunded  in  one  year 316 

Recoverable  for  usurious  interest  charges 423 

That  national  banks  may  borrow 427 

Annual  examination  of  bonds  by  association 310 

Annual  meeting  of  shareholders 232 

Annual  report  of  Comptroller  of  the  Currency 110 

Appointment: 

Agent,  shareholders 522 

Agent  to  examine  bonds 310 

Agent  to  witness  destruction  of  circulation 339 

Clerks  of  Comptroller's  office 105 

Committee  to  examine  plates,  etc 328 

Committee  to  witness  destruction  of  circulation 339 

Comptroller 101 

Deputy  Comptroller 103 

Directors  of  associations 204 

Dissenting  shareholders,  committee  of  apprisal 219 

Examiners  of  associations 527 

Officers  of  associations 204 

Receivers  of  associations 515,  520 

Shareholders'  agent 522 

Special  commission  for  preliminary  examinations  of  associations 320 

Vacancies  in  board  of  directors 237 

Appraisal.     (See  Shares.) 

Appraisal  of  value  of  stock  to  be  purchased  from  shareholders  dissenting  to  ex- 
tension of  charter 219 

Approval  of  Comptroller  of  Currency  required  for  extension  of  charter 217 

Approval  of  request  for  receiver  to  buy  property 524 

Articles  of  association: 

Amendment  of,  for  extension  of  corporate  existence 215,  216 

Amendment  of,  restricted 225 

Converted  State  bank,  execution  of,  by 245 

Increase  of  capital  stock  by  amendment  of 229 

Proceedings  in  regard  to,  and  form  of 201 

Provisions  for  elections  when  not  provided  for  in 238 

Reduction  of  capital  stock , 230 

Assessments: 

For  examination 527 

Impairment  of  capital 430 

Plates,  engraving  of 220, 414 

Redemption  of  circulation 3i3 

Repayment  of  tax 449 

Reports  of  circulation,  failure  to  make 447,  448 

Reports  of  condition  and  earnings  and  dividends,  failure  to  make 443 

Semiannual  duty 446 

Shareholder's  personal  liability ^4 240 

Tax  on  unauthorized  circulation 708-710 

Transportation  of  notes 414 

Assessors,  shareholders'  lists  accessible  to 439 

Assets: 

Comptroller's  annual  report  to  contain  statement  of  national  banks 110 

Expense  of  receiver  paid  from 519 

Failed  bank,  may  be  turned  over  to  agent 522 

Insolvent  banks,  distribution  of 517 

Of  consolidated  banks 503 

Receiver  to  collect,  etc 515 

Receiver  to  sell  on  order  of  court 515 

Report  of  condition  to  contain  statement  of 440 

Shareholders'  agent  to  distribute 522 

United  States  has  paramount  lien  on 511 

Assignee,  failure  to  pay  installments 227 

Assignment  (see  also  Treasurer  United  States;  Bonds,  United  States): 

Of  assets  after  insolvency  void 529 

Re§:ister  of  bonds 307 

United  States  bonds  as  security  for  circulation 306 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  223 

Parajrraph. 

Assistant  Deputy  Comptroller..'. 104 

Assistant  Treasurer  of  United  States: 

Circulation  of  liquidated  and  insolvent  banks,  duty  of 505 

Circulation,  unfit,  to  be  sent  to  Treasurer  for  redemption 414 

Fraudulent  notes  to  be  marked  by 746 

Public  moneys  to  be  deposited  with 730,  731 

Unauthorized  withdrawal  of  public  money  from 737 

Associations: 

Defined 300 

National  banking,  provisions  for  formation  of 201 

Organized  under  act  of  1863  not  affected 247 

To  be  notified  of  transfer  of  bonds 308 

To  issue  gold  notes 341 

Assorting  charges  for  redeemed  circulation 414 

Attachment,  not  to  issue  prior  to  final  judgment  of  court 529 

Attorney  General,  opinions  of 900-903 

Auction: 

Bonds  of  expiring  associations 221,  504 

Bonds  of  liquidating  associations 221,  504 

Bonds,  sale  of,  when  association  has  failed  to  pay  its  circulating  notes 511 

Enforcement  of  assessment,  impaired  capital 430 

Purchase  of  property  by  receiver 523 

Sale  of  delinquent  national-bank  stock 430 

Sale  of  dissenting  shareholders'  stock 219 

Authority: 

To  commence  business 320 

To  coin  aUver  dollars 722 


224  INDEX   TO    NATIONAL-BANK   ACT,   ETC. 


B. 

Paragraph. 

Bad  debts  defined 429 

Ballot.     (See  Elections;  Shareholders.) 

Bank  balances,  net  to  or  from  to  be  used  in  reserve  calculations 410 

Bank  circulation.     (See  Circulation.) 

Bank  examiners 527 

Bank  examinations 527 

Banking  house : 

Association  may  own 223 

Location 400 

Banking  powers  (see  also  Real  estate  and  national  banking  associations) : 

Corporate 204 

Incidental 204 

Banks  not  in  reserve  cities.     (See  Country  banks.) 

Banks  other  than  national,  statement  to  be  given  in  annual  report 110 

Bills  of  exchange: 

Discount  of 422 

Illegal  transfer  of,  void .* 529 

Interest  on 422 

Member  bank  of  Federal  Reserve  System  may  accept 206 

Not  considered  borrowed  money 425 

Penalty  for  official  malfeasance,  relative  to 436 

Restrictions  on  loans,  not  applicable  to 425 

Restriction  on  associations,  liability,  not  applicable  to 427 

Transfer  of,  to  create  a  preference,  void 529 

Bimetalism 762 

Board  of  directors.     (See  Directors.) 

Bonds,  official: 

Comptroller 102 

Deputy  Comptroller 103 

Officers  of  associations 204 

Public  depositaries 243 

Receiver 515 

Shareholders'  agent 522 

Shareholders',  on  election  of  agent 522 

Bonds,  others,  to  secure  deposits 243 

Bonds,  United  States: 

Annual  examination  of,  provided  for 310 

Assignment  or  transfer  of,  to  be  countersigned  by  Comptroller 306 

Association  to  be  notified  of  transfer  or  assignment 308 

Cancellation  of,  forfeited,  for  circulation  redeemed 510 

Circulation  issuable  on 304,  317,  323 

Circulation  obtainable  on 304,  317,  323 

Comptroller,  access  to  records  of,  and  deposit  with  Treasurer 309 

Coupon,  to  be  exchanged  for  registered 305 

Deficiency  in  proceeds  from  sale  of,  what  first  lien 511 

Defined 301 

Deposit  of,  not  required  to  begin  business 302 

Depositaries  required  to  deposit 243 

Depreciation  in  value  of,  how  made  good 311 

Exchange  of,  for  Treasury  gold  notes 318 

Exchange  of,  permitted 311 

Forfeiture  of,  for  failure  to  redeem  circulation 508 

General  provisions  respecting 311 

Gold,  banks  to  deposit 341 

Government  depositaries,  deposit  of,  required 243 

Increase  of  deposit  of 304 

Interest  on,  liable  for  penalty  for  failure  to  make  reports  to  Comptroller. . .  443 

Interest  on,  liable  for  penalty  for  failure  to  make  returns  and  pay  taxes ....  425 

Interest  on,  withheld  on  impaired  capital 430 

Lawful  money,  deposit  of,  to  retire  circulation  and  withdraw 312 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  225 

Bonds,  United  States — Continued.  Paragraph. 

Liquidating  bank,  reassignment  of 504 

Minimum  amount  to  be  deposited 302,  313 

Maximum  circulation  issuable  on 323 

Obligations  of  the  United  States,  including,  defined 739 

Panama  Canal,  available  as  security  for  circulation 303 

Panama  Canal,  additional  issue  of,  authorized 767 

Panama  Canal,  authorized  by  act  of  August  5,  1909,  not  receivable  as    se- 
curity for  circulation 768 

Penalty  for  illegal  dealing  in  counterfeit 746 

Penalty  for  illegal  possession  or  use  of  material  for  printing 741 

Penalty  for  passing  counterfeit 743 

Penalty  for  taking  or  possessing  unauthorized  impressions  of  tools,  etc., 

used  in  printing 74-5,  746 

Record  of  transfer  or  assignment  of,  to  be  kept  by  Comptroller 307 

Reduction  of  deposit  of 304 

Refunding  under  provisions  of  Federal  reserve  act 304 

Refunding  of 316,  757 

Registered,  to  be  deposited  with  Treasurer  United  States 301,  302 

Relation  of,  on  deposit  to  capital 304 

Return  of,  to  association 311 

Sale  of,  at  auction  for  failure  to  redeem  circulation 511 

Sale  of,  privatsly,  at  not  less  than  par,  for  failure  to  redeem  circulation. .       512 

Secretary  of  Treasury  authorized  to  sell,  to  make  good  gold  reserve 750 

Taxation,  exempt  from 716 

Tax  on  circulation  secured  by 444 

Tax  on  circulation  seciu-ed  by  Panama  Canal  bonds 303,  444 

To  secure  deposits 243 

Transfer  of,  how  effected 306 

Treasurer  of  United  States  to  have  access  to  records  of  Comptroller  relative  to      309 

Treasurer  United  States  to  hold ,  in  trust  for  association 306 

Withdrawal  of,  and  of  circulation 312,  414 

Withdrawal  of 304 

Bookkeeper.     {See  Officers.) 

Books.     {See  Comptroller;  Treasurer  United  States.) 

Borrowed  money  {see  Liability  of  association,  Loans): 

Limit  of  amount 427 

To  make  good  gold  reserve,  by  Secretary  of  Treasury,  authorized 750 

Branch  banks: 

Chicago  Worid 's  Fair 803 

Louisiana  Exposition 803 

State  banks  entering  system  by  conversion  may  retain 246 

Branches,  foreign,  authorized 210 

Broker,  when  national  bank  may  act  as  broker  in  procuring  loans  on  real  estate .      209 

Bureau  of  Comptroller  of  Currency 100 

Bureau  of  Currency,  expense  of 327 

Bureau  of  Engraving  and  Printing,  Director  of,  designated  as  custodian  of 
plates,  dies,  etc.,  of  Federal  reserve  and  national  bank  notes 327 

Business: 

Authorization  of  association  to  begin,  when 226,  319 

Place  of 400 

Suspension  of,  after  default  to  pay  circulation 509 

Business  paper: 

Discount  of 422,  427 

Excepted  from  limit  on  loans 425 

By-laws  prescribed  by  directors  of  national  banks 204 

161312°— 20 15 


226  INDEX   TO   NATIONAL-BANK   ACT^   ETC. 


c. 

Paragraph. 

Call  for  report  of  condition 440 

Cancellation.     {See  Bonds,  United  States,  circulation.) 

Cancellation  of  bonds  forfeited 510 

Cancellation  of  circulation  redeemed 514 

Capital  stock: 

Agent  of  shareholders  to  distribute  assets  ratably 522 

Amount  required 224 

Amount  to  be  paid  before  association  begins  basiness 226, 319 

Appointment  and  qualification  of  shareholders'  agent 522 

Assessment  for  impairment  of 430 

Association  to  begin  business,  amount  to  be  paid 226 

Borrowed  money  must  not  exceed 427 

Branches  of  converted  State  banks "  246 

Certificate  of  officers  and  directors  required  relative  to  payment  of 226,  319 

Circulation  not  to  be  used  to  create  increase  of 428 

Circulation  outstanding  not  exceeding  5  per  cent  of,  free  from  taxation 706 

Circulation,  proportion  to , 304 

Conversion  of  State  banks  authorized 245 

Creditors'  bill  against  shareholders 521 

Deposit  of  United  States  bonds  based  on 302 

Directors,  individual  liability  of 526 

Directors,  qualification  of 233 

Disposition  of,  delinquent  shareholders 227 

Dividends  declared  on,  and  net  earnings  in  excess  of  dividends  to  be 

reported 442 

Dividends  on,  and  creation  of  sxirplus 424 

Dividends  on,  when  prohibited 429 

Division  of,  into  shares,  and  number  and  value  of  each 225 

Enforcement  of  assessment,  to  make  good  impairment  of 430 

Enforcing  individual  liabilities  of  shareholders  of,  by  receiver 520 

Enforcing  payment  of 227 

Holders  of  shares  of,  in  expiring  associations  to  be  extended  or  reorganized, 

to  have  preference  in  allotment  of  shares 219 

Holding  of  shares  of,  required  by  directors 233  236 

Impairment  of,  assessment  for 430 

Impairment  of,  receiver  may  be  appointed  for  failure  to  make  good 520 

Increase  of,  provisions  for 228,  229,  304 

Individual  liability  of  shareholders 240 

Liability  of  association  not  to  exceed ,  except  on  account  of  certain  demands.  427 

Liquidation,  shareholders  owning  two- thirds  of,  may  vote  to  go  into 500 

List  of  shareholders  of,  to  be  transmitted  to  the  Comptroller 439 

Loans  on  security  of  shares,  or  purchase  of,  prohibited 426 

Loans  restricted  to  10  per  cent  of,  including  surplus,  etc 425 

Minimum  amount,  required  of  national  banks 224 

Minimum  of  bonds  to 302 

Number  of  shares  and  amount  of,  stated  in  organization  certificate 202 

Of  national  banks  held  by  converted  State  banks 245 

Payment  of,  provisions  for 226 

Penalty  for  failure  to  make  good  impairment  of 430 

Personal  liability  of  shareholders 240 

Population  to  govern  minimum  amount 224 

Purchase  of,  prohibited 426 

Receiver  may  be  appointed  when,  impaired 430 

Receiver  may  be  appointed  when,  not  fully  paid  in 227 

Reduction  of,  provisions  for 230,  304 

Relation  of  bond  deposit  to 304 

Restoration  of,  when  below  the  minimum  required 227 

Shareholders  of,  list  to  be  kept  and  subject  to  inspection 439 

Shareholders  owning  two-thirds  of,  may  place  an  association  in  liquidation. .  500 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  227 

Capital  Block — Continued.  Paragraph. 

Shareholders  owning  two-thirds  of,  may  change  title  and  location 211 

Shareholders  owning  two-thirds  of,  may  increase 228,  229 

Shareholders  owning  two-thirds  of,  may  reduce 230 

Shareholders  owning  two-thirds  of,  may  extend  corporate  existence 216 

Shareholders  entitled  to  one  vote  on  each  share  of,  neld  by 231 

Shareholders  of,  converted  State  banks  not  liable,  when 240 

Shareholders  of,  not  consenting  to  an  extension  may  withdraw 219 

Shares  of,  acquired  for  debt  to  be  disposed  of,  when 426 

State  taxation  of  shares  of 451 

Subscriptions  to,  when  payable 226 

Surplus  fund  to  be  created  to  the  amount  of  20  per  cent  of 424 

Transfer  of  shares 241 

United  States  registered  bonds  to  be  deposited  as  security  for  circulation 

to  be  based  on 302 

When  increase  of,  becomes  valid 228 

Withdrawal  of  bonds  on  reduction  of,  or  closing  of  business 304 

Withdrawal  of  bonds,  limited 311 

Withdrawal  of,  prohibited 429 

Cashier  (see  also  President;  Officers): 

Appointment  of 204 

Bank  examiner  may  examine,  on  oath 527 

Bond  assignment  by 306 

Certificate  of  officers  and  directors 319 

Certificate  of  stock  payment 226 

Circulating  notes,  to  sign 324,  337 

Election  or  appointment  of 204 

Embezzlement  by 436 

Examiner  of  own  bank,  can  not  be 527 

Expiration  of  corporate  existence,  certification  by 221 

Extension  of  corporate  existence,  certification  by 216 

False  certification  of  checks 436 

Incomplete  circulation,  provisions  relative  to 417 

Increase  of  stock,  certification  of 228 

Liquidating  bank,  duty  in 501 

Penalty  for — 

Countersigning  or  delivering  circulation  improperly 344 

False  certification  of  checks 434,  439 

Issuing  circulation  of  expired  associations 747 

Official  malfeasance 436 

Pledging,  etc.,  circulation 432 

Unauthorized  receipt  of  public  money 738 

Protest  of  circulation,  waiving  notice  of 507 

Proxy,  not  to  act  as 231 

Reports  of  condition,  verified  by 440,  441 

Reports  of  earnings  and  dividends,  verified  by 442 

Shareholders,  lists  of,  by 439 

Signature  of,  forged  or  wanting,  not  to  invalidate  circulation 417 

Taxable  circulation,  returns  by 446 

Unauthorized  circulation,  returns  by 710 

Voluntary  liquidation,  certified  by 501 

Cash  reserve  required : 

Banks  elsewhere  than  in  reserve  city 405 

Central  reserve  city 407 

Reserve  city  banks 406 

Central  reserve  agents.     (See  Agents;  Reserve;  Reserve  agents.) 

Central  reserve  cities: 

Cash  reserve  required -lO? 

Number  and  classification  of 'lOl 

Certificate: 

Certified  copy  of  organization,  evidence ~W 

Comptroller  s,  of  authority 320 

Converted  State  banks 245 

Destruction  of  circulation  on  retirement  account 416 

Destruction  of  notes 339 

Execution  of  organization 203 

Extension  of  corporate  existence 217 


228  INDEX   TO    NATIONAL-BANK   ACT,   ETC. 

Certificate — Continued.  Paragraph. 

Increase  of  stock  valid,  when 228 

May  be  withheld,  when 320 

Officers  and  directors  to  attest 319 

Of  deposit  as  time  deposits 403 

Of  payment  of  stock 226 

Organization,  to  specify 202 

Payment  of  installments  of  stock  to  be  certified 226 

Publication  of  Comptroller's,  of  authority 321 

Purchase  of  property  by  receiver,  required 523 

Reduction  of  stock  valid,  when 230 

Sealed,  of  Couiptroller,  evidence 703 

To  be  made  by  association,  showing  bonds  deposited  with  Treasurer 310 

Voluntary  liquidation oOl 

Certificates: 

Gold,  issue  of 433 

Gold 754 

Silver ' 755 

United  States,  subject  to  State  tax 717 

Certification  of  checks,  when  forbidden,  penalty  for 434, 435 

Certified  checks,  receivable  under  certain  conditions  for  duties  on  imports, 

internal  taxes,  etc 769,  770 

Certified  copies  of  reports,  etc 703.  704 

Change  of  location,  special  acts  authorizing 803 

Change  of  title  and  location 211 

Change  of  title  and  location,  debts  not  affected  by 212 

Charges  for  transportation  and  assorting  of  circulation  for  redemption 414 

Charter  (see  also  Corporate  existence): 

Certificate  of  Comptroller  authorizing  the  bank  to  begin  business  known  as.  320 

Extension  of 215 

Forfeiture  of. 526 

Issue  of,  to  national  banks 320 

Reextension  of 222 

Term  for  which  issued 204 

Charter  number  of  Fifth-Third  National  Bank  of  Cincinnati,  Ohio,  changed . . .  802 

Charter  number  to  be  printed  on  circulation 325 

Checks: 

Certified,  receivable  for  duties  on  imports  and  internal  taxes 769,  770 

False  certification  of,  unlawful 434 

Falsely  certified,  an  obligation  of  association 434 

Penalty  for  false  certification  of 435 

Chicago,  111. ,  designated  as  central  reserve  city 401 

Cincinnati,  Ohio,  change  of  charter  number  of  Fifth-Third  National  Bank 802 

Circulation: 

Aggregate  amount  not  limited 332 

Amount  of,  obtainable 323 

Amount  of,  obtainable  by  gold  banks 341 

Association  may  issue 204 

Association  to  receive  interest  on  bonds  as  long  as,  honored 311 

Associations  consolidating,  deposit  of  lawful  money  to  retire,  unnecessary.  503 

Associations  to  redeem,  in  lawful  money  on  demand 401 

Banks  other  than  national,  tax  on 708-710 

Bonds  in  excess  of  amount  required  may  be  withdrawn 304 

Bonds  forfeited  when,  dishonored 508 

Bonds  having  been  forfeited 508 

Bonds,  United  States,  to  secure 302 

Capital  not  to  be  reduced  below  amount  of  outstanding 230 

Cancellation  of  redeemed 514 

Certificates  of  destruction,  by  whom  executed 339 

Charter  number  on 325 

Collection  of  tax  on 448 

Consolidating  banks 503 

Cost  of  plates  to  be  paid  by  association 414 

Counterfeiting,  etc 344,  346,  740,  741,  747 

Countersigning  unlawfully 344 

Denominations,  minimum 329 

Deposit  of  lawiul  money  to  withdraw 314 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  229 

Circulation — Continued.  Paragraph 

Deposit  of  United  States  bonds  to  secure 302 

Deposit  of  bonds  to  be  increased  when  capital  is  increased 304 

Destroyed,  to  be  replaced  by  an  equal  amount  of  new  notes 414 

Disposition  of  redemption  account  balances 416 

Enforcins;  payment  of  tax  on 448 

Examination  of  bank  upon  request  of,  by  a2;ent  of  Comptroller 508 

Expense  of  plates  for  new  notes  of  extended  banks 220 

Expenses  of  redemption,  how  paid 414 

Expired  associations,  penalty  for  issuing 747 

Extended  bank,  shall  differ  "from  prior  issue 220 

Failed  banks,  redemption  of 505 

Failure  to  redeem 507 

Federal  reserve  banks 317 

For  what,  is  receivable 337 

Fraudulent  notes  to  be  so  stamped 748 

Gain  from  lost  and  destroyed 220 

Gold  banks,  amount  not  limited 342 

Gold  bank,  to  be  redeemed  in  gold  coin 341 

Government  depositaries  to  receive,  at  par 243 

Imitation  of,  prohibited 345 

Increasing  capital  stock,  use  of,  prohibited 428 

Inscription  on 324,  341 

Lawful  money  deposit  to  retire  circulation  limited 314 

Limit  on  aggregate  amount  of 323 

Liquidating  banks,  redemption  of 505 

Liquidating  bank  to  deposit  lawful  money  to  redeem 504 

Maceration  of ". 339,  340 

Minimum  amount  that  may  be  withdrawn 312 

Minimum  denominations 329 

Minimum  deposit  of  bonds  required 302 

Mutilation  of,  prohibited 346 

Not  considered  borrowed  money 427 

Notice  of  redemption  of,  to  be  forwarded  to  bank 414 

Notice  to  present,  for  redemption  when  bonds  have  been  forfeited 510 

Of  converted  State  bank,  where  redeemable 246 

Other,  prohibited  for  national  bank 338 

Panama  Canal  bonds  to  secure 303 

Paper  for  printing 326 

Penalty  for  engraving,  etc.,  without  authority 742 

Penalty  for  failure  to  make  return  of,  taxable 447 

Place  for  redemption  of 414 

Plates  and  dies  for  printing  of 327 

Plates  and  dies  to  be  engraved  for 324 

Pledging,  as  security  prohibited 428 

Profit  on  unredeemed,  inures  to  the  United  States 220 

Proceedings  when  return  is  not  made 712 

Prohibition  against  circulating  uncurrent  notes 431 

Proportion  to  bonds  deposited 323 

Proportion  to  capital 302 

Protest  of 507 

Receivable  at  par  by  all  national  banks 425 

Receivable  for  what 337 

Redeemed,  to  be  canceled 514 

Redemption  fund 414 

Redemption  of,  closed  banks 505,  506 

Redemption  of,  extended  banks 220 

Redemption  of,  incomplete 417 

Redemption  of,  in  United  States  notes 414 

Redemption  of,  liauidating  banks 505,  506 

Redemption  recoras 513 

Reduction  or  retirement  of 313 

Refunding  excess  tax 449 

Register  of  Treasury's  signature  to  be  on 324 

Reserve  not  determined  by 402 

Reserve  not  to  be  kept  on 402 

Reserve  requirement  repealed 402 


280  IXDEX    TO    NATIONAL-BANK   ACT,   ETC. 

Circulation — Continued.  Paragraph. 

Restriction  of  tax  pro\'isions 714 

Restriction  on  notes  less  than  SI 718 

Restriction  on  notes  less  than  $5 329 

Restriction  on  notes  of  $5 323 

Retirement  account 416 

Retirement  of 314,  315 

Retiring,  under  provisions  of  Federal  reserve  act 304 

Semiannual  return  of,  subject  to  tax 446.  711 

Signing 324,  337,  417 

Statement  concerning,  of  closed  banks  to  appear  in  annual  report  of  Comp- 
troller        110 

Tax  on 444 

Tax  on  converted  bank 713 

Tax  on,  insolvent  banks  remitted 451,  715 

Tax  on,  secured  by  Panama  Canal  bonds 303 

Tax  on,  State  bank  issue 705,  712 

Tax  on,  subject  to  State  law 717 

Treasurers  and  public  depositaries  to  return  all,  of  closed  banks 505 

When  exempt  from  tax ^ 706 

When  issuable 337 

Withdrawal  of,  by  depositing  lawful  money,  limitation  of 312,  314,  414 

Worn  or  mutilated,  to  be  redeemed 414 

Worn  out  or  mutilated,  destroyed 339,  340 

Citizens'  national  banking  associations,  where 214 

Claims  (see  Insolvency:  Receiver),  notice  to  present,  against  insolvent  banks. .       516 

Classification  of  central  reserve  cities 401 

Clearing  house,  receipt  in  settlement  of  balances  of  gold  and  silver  certificates 

bv 433 

Clerks: 

Appointment  and  qualification  of,  by  the  Secretary 105 

Clerical  force  for  the  redemption  of  circulating  notes 415 

Duties  of,  fixed  by  the  Comptroller 105 

Employment  of,  for  the  bureau,  by  the  Comptroller 105 

Names  and  compensation  of,  in  annual  report  and  Official  Register 110,  111 

Of  banks  can  not  act  as  proxy 231 

Closed  associations  {see  Insolvency),  statement  to  appear  in  annual  report 110 

Coin  (see  Gold :  Silver),  right  to  redeem  circulation  in 414 

Coins,  Philippine  Islands,  legal  tender 719 

Collection  of  penalty  for  failure  to  make  semiannual  return  of  circulation 446 

Collection  of  tax  on  circulation,  enforcement  of 448 

Commencement  of  business,  provisions  to  be  complied  with,  prior  to 319 

Commercial  paper: 

Discount  of 422,  427 

Excepted  from  limit  on  loans 425 

Commission,  not  to  be  paid  officer,  director  or  employee  of  member  bank 438c 

Commissioner  of  Internal  Revenue,  tax  on  circulation  of  insolvent  banks  to  be 

remitted  by 715 

Commissioner  of  Internal  Revenue,  returns  of  circulation  other  than  national, 

to  be  made  to 711,712 

Committee: 

Of  appraisal 219 

Of  destruction,  pro\'isions  for 339 

Compounding  debts  of  insolvent  national  banks 515 

Comptroller  of  Currency: 

Action  as  to  agent  of  shareholders 522 

Agent,  special,  to  be  appointed  for  association  failing  to  redeem  circulation .       50S 

Annual  report  to  be  made  to  Congress  by 110 

Appointment,  term,  and  salary  of 101 

Approval  required  for  extension  of  charter 217 

Approve  receiver 's  purchase  of  property 524 ,  525 

Approve  reserve  agent 40i 

Articlefl  of  association  and  organization  certificate  of  national  banks  to  be 

filed  with 201,  202 

Assessment  of  tax  on  circulation  when  bank  fails  to  make  return 447 

Bond  of 102 

Bonds  and  records  ot,  with  Treasurer,  access  to 309 


INDEX   TO   NATIONAL-BANK   AOT,  ETC.  231 

Comptroller  of  Currency — Continued.  Paragraph. 

Bonds,  sale  of,  privately  or  at  public  auction,  by 511,  512 

Bond  transfers  to  be  recorded  by 307 

Capital  stock,  increase  or  reduction  of,  to  be  approved  by 228,  229,  230 

Certificate  to  begin  business 320 

Certificates  of  destruction  of  circulation  on  retirement  account 416 

Certified  copy  of  organization  certificate,  evidence 704 

Charter  number  of  bank,  to  be  put  on  circulating  notes  1  )y 325 

Circulation — 

Of  extended  banks  to  be  destroyed  1  )y 220 

Plates  and  dies  to  be  engraved  bv  order  of 324 

To  be  issued  by * 323 

Worn,  mutilated,  destruction  of 339,  340 

Cited  in  injunction  of  receiver 518 

Clerks 105 

Creditors  of  failed  banks,  dividends  to  be  paid  to,  by 517 

Distribution  of  annual  report  of 112,  113 

Duties  of 100 

Enforce  stockholders'  liability 240 

Engraving  of  plates  for  printing  of  circulation  to  be  ordered  by 324 

Enjoined  by  bank,  how 518 

E\adence,  sealed  certificates 703 

Examiners,  appointed  by 527 

Examiners'  salary',  recommended  by 527 

Examiners'  reports  to 527 

Exchange  of  bonds  to  secure  circulation 311 

Expense  of  examinations  assessed  by 527 

Expense  of  bureau 327 

Extension  of  corporate  existence,  approval  of,  by 215 

Federal  Reserve  Board,  ex  officio  member  of 101 

Fine  for  failure  to  make  reports  to 443 

Forfeit,  cancel,  or  sell  bonds  for  default  in  payment  of  notes 512 

Forfeiture  of  charter,  suit  to  be  brought  by 526 

Impairment  of  capital,  action  to  be  taken  by 430 

Interest  in  banks,  prohibited 106 

Jurisdiction  of  district  court  to  enjoin 701 

Liquidation  of  associations,  to  be  notified  of 501 

List  of  shareholders,  copy  to  be  sent  to 439 

National  bank  examiners  appointed  by 527 

Notice  to  banks  short  in  reserve 402 

Notice  to  creditors  of  insohent  banks 516 

Notice  to  present  circulation  for  redem])iion  when  bonds  have  been  for- 
feited    510 

Oath  of  directors  to  be  filed  with 236 

Oath  to  l)e  taken  and  Iwnd  to  be  given  by 102 

Organization  certificate  to  be  filed  with 203 

Payment  of  ca])ital  to  he  certified  to 226 

Plates  and  dies,  examination  of 328 

Printing  annual  re])ort  of 112, 113 

Proceedings  to  enjoin 701,  702 

Qualification  of 102 

Reappraisal  of  value  of  stock  of  shareholders  by 219 

Receivers  appointed  1  )y 402,  515, 620 

Reports  of  banks,  other  than  national,  to  be  obtained  and  published,  by. .  110 

Reports  to  be  made  to 440,441 

Report  to  be  made  annually  to  Congress 1 10 

Rooms,  etc 1  '^8 

Salar^'  of 101 

Seal  of 107 

Shareholders'  agent,  action  as  to ^22 

State  banks  converted,  approved  by 245 

Term  of 101 

Title  and  location,  change  of,  to  be  approved  l>y 211 

Title  of  national  banks  subject  to  approval  of 202 

Transfer  and  assignment  of  bonds  to  be  con  ntersignod  1  'y 306 

To  determine  if  association  can  commence  business 319 

Withdrawal  of  circulation  to  have  consent  of 314 


232  INDEX   TO    NATIONAL-BANK    ACT,    ETC. 

Paragraph. 
Comptroller  of  Treasury,  refunding  of  excess  payment  of  tax  on  circulation  to 

be  approved  by 449 

Condition,  report  of 440 

Congress: 

Comptroller's  annual  report  to  be  made  to 110,  111 

Visitatorial  powers  of 527 

Consent  of  two-thirds  necessary  for  extension  of  charter 216 

Consolidation  of  national  banks,  provisions  for 503,  503a 

Contract  insuring  or  guaranteeing  deposits  by  national  banks 903 

Contracts,  power  for  association  to  make 204 

Contributions,  political,  prohibited 437 

Conversion  of  national  gold  banks  into  currency  banks 343 

Conversion,  State  banks 245 

Corporate  existence: 

Expiration  of 221 

Extension  of 215-217 

Reextension  of 222 

Term  of 204 

Corporate  powers.     (See  Powers.) 

Corporate  seal,  power  to  adopt  and  use 204 

Corporation  {see  also  Liability  of  associations),  association  becomes,  when 204 

Coporations,  interlocking  directorates  forbidden 234,  235 

Cost.     {See  Expense.) 

Cost  of  plates 220,  414 

Counterfeits  {see  Fraudulent  notes,  etc.) 748 

Counterfeiting,  making  or  using  notes,  plates,  tools,  etc 740,  748 

Counterfeiting,  plates  and  dies,  to  be  guarded  against 324 

Countrj'  banks: 

Caeh  reserve  required 405 

Distribution  of  reserve 405 

Reserve  required  to  be  held  with  Federal  reserve  bank 405 

Reserve  requirements  for 405 

Reserve  that  may  be  held  with  bank  in  reserve  or  central  reserve  cities...       405 

Coupon  bonds,  to  be  exchanged  for  registered = 305 

Courts.     {See  Crimes,  jurisdiction,  etc.) 
Creditors: 

Bill  in  equity  by,  against  shareholders 521 

Checks  falsely  certified  a  valid  obligation  of  association 436 

Directors'  liability 526 

Expiration  of  existence,  notice  to 221 

Insolvency,  notice  of ,  to 516 

Nonpayment  of  circulation,  notice  of,  to 510 

Payment  of  assets  of  failed  banks 517 

Preference  of,  illegal 529 

Rights  not  to  be  impaired 529 

Shareholders,  list  of,  subject  to  inspection  by 439 

Shareholders,  personal  liability  of,  to 240 

Voluntarj^  liquidation,  notice  of ,  to 501 

Creditor's  bills;  against  shareholders 521 

Crimes,  jurisdiction,  etc.: 

Abstraction  of  money,  funds,  etc 436 

Aiders  and  abettors 436 

Counterfeiting  circulation,  etc 740,  744 

Dealing  in  counterfeit  circulation 746 

Embezzlement 436,732,737,738 

Enjoining  of  Comptroller  and  receiver 518 

Evidence,  certified  copy  of  organization  certificate 704 

Evidence,  sealed  certificate  of  Comptroller  competent 703 

False  certification  of  checks 434,  435 

False  entries 436 

Forging  or  counterfeiting  United  States  securities 740 

Having  or  taking  unauthorized  impressions  of  tools,  etc 744,  745 

Illegal  possession  or  use  of  material  for  circulation 742 

Imitating  circulation  for  advertising  purposes 345 

Improper  countersigning  or  delivering  circulation 344 

Interlocking  directorates  forbidden 235 


INDEX   TO    NATIONAL-BANK   ACT,  ETC.  233 

Crimes,  jurisdiction,  etc. — Continued.  Paragraph. 

Issuing  circulation  without  authority 436 

Issuing  circulation  of  expired  associations 747 

Jurisdiction,  general,  of  national-bank  cases 214,  218 

Jurisdiction  to  enjoin  Comptroller  or  receiver 701 

Misapplication,  willful 436 

Mutilating  circulation 346 

Obligations  of  the  United  States  defined 739 

Official  malfeasance 436 

Passing  counterfeit  circulation 743 

Pledging  United  States  notes  or  bank  circulation 432 

Political  contributions 437 

Suits  in  which  United  States  or  its  officers  are  parties 700 

Taking  unauthorized  impression  of  tools,  etc 744 

Violation  of  national-bank  act 526 

Currency.     {See   Circulation;   Gold;  Gold   certificates;   Silver;  Silver  certifi- 
cates; Lawful  money;  United  States  note  certificates;  Federal  reserve  notes.) 

Currency  Bureau: 

Designation  of  Office  of  Comptroller  of  Currency 100 

Expense  of 327 

Expense  of,  in  liquidating  failed  banks Ill 

Offices,  vaults,  etc.,  for 108 

Submission  of  list  of  employees 110,  111 

Custodian  of  plates  and  dies,  etc.,  for  Federal  reserve  and  national-bank  notes. .  327 


234  INDEX   TO    NATIONAL-BANK   ACT,   ETO. 


D. 

Paragraph 

Date  of  election  of  directora 238 

Date  upon  which  an  association  becomes  a  body  corporate 204 

Date  when  application  for  extension  of  charter  may  be  made 215 

Dates  for  payment  of  tax  on  circulation 303 

Dealing  in  counterfeit  circulation,  penalty  for 746 

Debts,  compounding  of: 

Not  affected  by  change  of  title  or  location. : 212 

Real  estate  held  for 223 

Declaration  of  dividends 428 

Default  in  payment  of  circulation 507,  509 

Deficiency.     {See  Bonds;  Capital;  Circulation;  Receiver;  Reserve.) 
Definitions: 

Bad  debta 429 

Central  reserve  cities 401 

Demand  and  time  deposits 403 

Of  national  banking  associations  and  associations 300 

Of  United  States  bonds 301 

Reserve  cities 402 

Delinquent  shai"eholders,  sale  of  stock  of 430 

Delivery  of  circulating  notes 323 

Demand  deposits  defined 403 

Demands  for  which'national-bank  notes  are  receivable 337 

D  enominations : 

Circulation  of  gold  banks 341 

CiiTulation  of  national  banks 324 

Converted  Ptate-bank  shares 245 

Gold  certificates 433,  754 

Panama  Canal  bonds 767 

Shares  of  national-bank  stock 225, 245 

Silver  certificates 755 

Treasury  notes 764 

Depositaries  of  public  moneys 243,  244 

Depositaries  of  the  United  States,  circulation  of  liquidating  and  insolvent 

banks,  duty  of,  to  return 505 

Deposit  guaranty  law: 

Kansas 901 

Oklahoma. . . 900 

Deposit  not  required  in  consolidation 503 

Deposit  of  United  States  bonds  not  required 302 

Deposit  of  lawful  money: 

For  circulation  of  extending  banks 220 

To  redeem  circulation  of  liquidating  banks 502 

To  withdraw  circulation 311 

Deposits: 

Insolvent  banks,  deposit  of  funds  of 515 

Insurance  or  guaranty  of,  by  national  banks 903 

Not  considered  borrowed  money 427 

Public  money 243,  244,  730 

Postmasters' 731 

Reserve  to  be  kept  on 405,  407,  414,  744 

Reserve  determined  by 402,  410 

To  redeem  circulation,  disposition  of 416 

United  States,  no  reserve  required  to  be  held  against 413 

Various  kinds  defined 403 

With  nonmember  banks  limited 408 

Depreciation  {see  Bonds;  Circulation)  in  value  of  bonds  to  secure  circulation. .  311 
Deputy  Comptroller  of  Currency: 

Additional,  bond  of 104 

Appointed  by  Secretary  of  the  Treasury 103, 104 

Appointment 103 


INDEX    TO    NATIONAL-BANK    ACT,   ETC.  235 

Deputy  Comptroller  of  Currency — Continued.  Paragraph. 

Bond 103 

Duties 103 

Interest  in  bank  prohibited 106 

Oath  to  be  taken 103 

Salary  of 103 

Deputy  comptroller,  additional: 

Bond  of 104 

Powers  of 104 

Salary  of 104 

Description  of  national-bank  notes 324 

Designation  of  central  reserve  cities 401 

Destruction  committee  provided  for 339 

Destruction  of  circulation  of  extended  banks 220 

Destruction  of  worn  out  and  mutilated  notes 339,  340 

Dies.     {See  Plates.) 

Director  of  Bureau  of  Engraving  and  Printing  designated  as  custodian  of  dies, 

plates,  etc.,  of  Federal  reserve  and  national-bank  notes 327 

Directors: 

Appointment  or  election  of 204 

Assessment  for  impairment  of  capital,  provisions  for  enforcement  of 430 

Attestation  of  reports  to  Comptroller  by 440 

Capital  impaired,  duties  in 227 

Certificate  of  officers  and 319 

Certification  of,  to  extension 216 

Conversion  of  State  banks,  action  by 245 

Dividends,  declaration  of ,  by 428 

Duties  of 204 

Election  of 204 

Election  postponed 238 

Embezzlement ,  penalty 436 

Enforcing  payment  of  capital 227 

Failure  to  hold  annual  election 23(S 

Forfeiture  of  charter  for  violation,  etc.,  by 526 

Interlocking,  prohibited 234 

Liquidated  bank,  duties  in 501 

Liability  of 526 

Names  and  residences  of,  to  be  ascertained  by  Comptroller 319 

Not  to  be  appointed  by  the  Comptroller  to  examine  own  bank 527 

Number  and  election  of 232 

Number,  constituting  board  of 232 

Oath  of 236 

Penalty  for  issuing  circulation  of  expired  association 747 

Penalty  for  official  malfeasance 436 

Penalty  for  political  contributions 437 

Penalty  for  unauthorized  receipt  of  public  monev 738 

President '. 239 

President  of  board  to  be  a 239 

Powers  of 204 

Provisions  for 232 

Proxy  can  not  act  as 231 

Purchase  of  securities  from  or  sale  to  director 438d 

Qualifications  of 233 

Rate  of  interest  paid  directors 43Se 

Restrictions  as  to  interlocking 234 

Sale  of  stock  acquired  from  delinquent  shareholdera 227 

Shareholders  dissenting  to  extension  to  give  notice,  etc 219 

Term  of 232 

Three-fourt  hs  to  be  resident  of  State 233 

Vacancies  in  board  of 237 

Disbursing  funds  of  United  States  officers,  depositing  with  national-bank 

depositaries 730 

Disbursing  officers,  penalty  for  unauthorized  deposit  of  public  money,  by 737 

Discount.     (See  Loans;  Liability  of  association;  Interest.) 

Dismissal  of  officers 20-1 

Disposal  of  redeemed  circulating  notes 513 

Disposition  of  assets  of  insolvent  banks ^17 


236  INDEX   TO    NATIONAL-BANK    ACT,  ETC. 

Paragrapli, 

Disposition  of  earnings,  by  United  States,  from  Federal  reserve  banks 750 

Disposition  of  redemption  account 416 

Dissenting  shareholders,  withdrawal  of,  on  extension 219 

Dissolution  {see  Expiration  of  corporate  existence;  Forfeiture;    Insolvency; 

Liquidation)  of  banks  not  extending  period  of  succession 221 

Distinctive  paper: 

National-bank  circulation,  etc.,  to  be  printed  on 326 

Unauthorized  possession  or  use  of 742 

Distribution  of  assets  by  shareholders'  agent 522 

Distribution  of  reserve: 

Banks  elsewhere  than  in  reserve  cities 405 

Central  reserve  cities,  banks  in __ 407 

Reserve  cities,  banks  in 406 

District  attorney,  suita  in  which  United  States  or  its  officers  are  parties,  to  be 

conducted  by : 700 

District  court,  jurisdiction  of,  to  enjoin  Comptroller 701 

Dividends: 

Comptroller  to  make  ratable,  of  assets  of  insolvent  banks 517 

Directors  may  declare,  when 424 

Earnings  and,  to  be  reported 442 

Not  to  be  paid  by  certain  converted  State  banks  when  surplus  is  impaired . .  240 

Penalty  for  failure  to  report  earnings  and 4^3 

Prohibited  when  reserve  is  short 409 

Restriction  on  association's  liability 427 

Unearned,  prohibited 429 

Unpaid,  not  considered  borrowed  money 427 

Divisions  of  Issue  and  Redemption  established  in  office  of  United  States  Treas- 
urer    752 

Drafts: 

Against  deposits  not  considered  borrowed  money 427 

Liability  of  association,  relative  to 427 

Member  banks  of  Federal  Reserve  System  may  accept 206 

Obligations  of  United  States,  including 739 

Official  malfeasance 436 

Penalty  for  mutilating 346 

Dues.     {See  Tax;  Duties.) 

Duties: 

Associations  organized  under  the  act  of  February  25,  1863 247 

Circulation — 

Converted  State  banks 713 

Enforcing  payment  of ,  on 448 

Exempt  from" 706 

Not  receivable  for  customs 337 

Refunding  excess  on 449 

Restrictions  on 714 

Semiannual  on 444,  447 

Unauthorized 705,  710 

Comptroller's 100 

Deputy  Comptroller's 103 

Directors' 204,  232,  236 

Disbursing  officers' 730 

Examiners' 527 

Gold  certificates  receivable  for 754 

Imports  and  internal  taxes  may  be  paid  by  certified  check 769,  770 

Officers' 204 

On  imports,  certified  checks  receivable  for,  under  certain  conditions 770 

PubUc  depositaries,  designation  and 243 

Receiver,  appointment  and 515 

Shareholders '  agent 522 

Duty  of  Treaijurer  i*  regard  to  circulation  of  liquidating  and  insolvent  banks.  505 


INDEX   TO   NATIONAL-BANK   ACT,  ETC.  237 


E. 

Paragraph. 

Earnings  and  dividends  to  be  reported 442 

Earnings  by  United  States  from  Federal  reserve  banks,  disposition  of 750 

Election  of  president  of  the  board 239 

Election  or  appointment  of  directors,  appointment  officers 204, 232 

Elections: 

Change  of  title  or  location 211 

Corporate  powers 204 

Extension  of  corporate  existence 7 215 

Failure  to  hold  annual 238 

Failure  to  hold  at  appointed  time 238 

Increase  of  stock 229 

Number  of  directors 232 

Oath  of  directors 236 

Qualifications  of  directors 233 

Qualifications  of  shareholders 231 

Reduction  of  stock 230 

Shareholders'  a^ent 522 

Voluntary  liquidation 500 

Embezzlement,  misapplication  of  funds,  etc.: 

Money-order  funds 732 

Penalty  for 436 

Unauthorized  deposit  of  public  money  by  disbursing  officer 737,  738 

Employees  and  expenses 110,  327 

Employees,  rate  of  interest  paid 438e 

Enforcing  payment  of  capital  stock,  provisions  for 227 

Enforcing  payment  of  tax  on  circulation 448 

Enforcement  of  act  in  reference  to  interlocking  directorates 235 

Engra\'ing.     (See  Circulation;  Plates  and  dies.) 

Enjoining  Comptroller  or  receiver  from  further  proceedings 518 

Equity,  bills  in,  against  shareholders 521 

Estates,  liability  of,  as  shareholders 242 

Estimate  of  reserve  requirements 410 

Evidence. 703,  704 

Examination  of  organization  proceedings  preliminary  to  granting  authority  to 

begin  business 319 , 

Examinations: 

Annual,  of  bonds 310 

Ascertainment  of  value  of  stock  of  dissenting  shareholders 219 

Assessment  for 527 

Bonds  and  records,  provisions  for 309 

Compensation  of  examiners 527 

Examiners  to  make 527 

Expense  of 527 

Federal  reserve  banks 527 

Foreign  branches  of  national  banks 210 

Limitation  of  visitatorial  powers 528 

List  of  shareholders  subject  to 439 

Member  banks 527 

National  banks 527 

Number  to  be  made 527 

Plates  and  dies,  annually 328 

Preliminary,  to  begin  business 319 

Preliminary,  expense  of 519 

Qualification  of  examiners 527 

Special,  of  extended  associations 217 

State  banks  and  trust  companies i>27 


238  INDEX    TO    NATIONAL-BANK    ACT,   ETC. 

Examiners:  Paragraph. 

Appointment  of 527 

Member  bank  not  to  make  loan  or  grant  any  gratuity  to 438a 

Not  to  perform  any  service  for  compensation  for  any  bank  or  officer 438b 

Not  to  disclose  name  of  borrowers  or  collateral  without  first  obtaining 

written  consent  of  the  Comptroller 438b 

Powers  of 527 

Qualifications  of 527 

Reports  of 527 

Salaries  of 527 

Special  commission 320 

Exceptions: 

Associations  organized  under  the  act  of  1863 319 

Converted  State  bank  may  continue  to  hold  stock  of  other  national  banks..  245 

Converted  State  banks  may  retain  branches 246 

Converted  State  banks,  par  value  of  stock 245 

Indebtedness  of  national  banks,  restriction  on 427 

Insolvent  national  banks  not  required  to  pay  tax 450 

Tax  on  obligations  of  United  States 716 

Tax  on  circulation  secured  by  Panama  Canal  bonds 303 

To  limit  on  amount  of  loans 425 

To  restriction  on  amount  of  borrowed  money 427 

Excessive  loans 425 

Excess  payment  of  tax  on  circulation,  refunding  of 449 

Exchange,  bills  of,  member  banks  of  the  Federal  Reserve  System  may  accept. . .  206 

Exchange  of  bonds 323 

Exchange  of  bonds  to  secure  circulation 311 

Exchange  of  certain  United  States  bonds  for  Treasury  gold  notes  by  Federal 

reserve  banks 318 

Exchange  of  coupon  for  registered  bonds 305 

Execution.     {See  Suit.) 

Executor,  power  of  national  bank  to  act  as 208 

Executors,  not  personally  liable 242 

Existence: 

Expiration  of 221 

Extension  of 215 

Reextension  of 222 

Term  of  corporate,  of  national  banks 204 

Expenditures  on  account  of  Panama  Canal 767 

Expenses: 

Bureau  of  the  Currency 327 

Bureau,  to  be  stated  in  Comptroller's  annual  report 110,  111 

Circulation,  redemption  of 414 

Circulation,  transportation  and  redemption  of  retired 313 

Duties  of  shareholders'  agent  relative  to 522 

Examinations 527 

Examinations,  dissenting  shareholders 219 

Examinations,  special 217 

Examiners 527 

Liquidation  of  failed  national  banks Ill 

Of  examinations 527 

Plates,  cost  of 220,  414 

Plates  and  dies,  examination  of 328 

Reappraisal  for  dissenting  shareholders 219 

Receivership,  how  paid 519 

Receivership,  paid  prior  to  election  of  shareholders'  agent 522 

Sale  of  bonds 511 

Sale  of  delinquent  stock 227 

Expiration  of  charter 221 

Expired  associations,  penalty  for  issiung  circulation  of 747 

Extension  of  charter 215 

Extension  of  charter,  provisiona  for  redemption  of  circulation 220 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  239 


F. 

Failed  national  banks:  Paragraph. 

Redemption  of  circulation 505 

Report  of  expenses Ill 

Faihire  {see  Insolvency): 

Of  shareholder  to  pay  installments 227 

To  hold  election  at  appointed  time 238 

To  make  reports  to  Comptroller 443 

To  make  return  on  circulation  other  than  national 712 

To  pav  up  capital,  assessment  for 430 

To  redeem  circulation 507 

To  redeem  circulation  of  extended  banks 220 

False  entry,  penalty  for,  official  malfeasance 436 

Falsely  certifying  checks 434 

Penalty  for 435 

Farm  lands,  loans  on 205 

Federal  reserve  agent: 

Information  concerning  member  banks  to  be  famished  Federal  Reserve 

Board  by 527 

Special  examination  of  member  banks  to  be  approved  by 527 

Federal  resers^e  banks: 

•     Circulation  may  be  issued  to 317 

Examination  of 527 

Examinations  of,  by  Federal  Reserve  Board 440 

Fiscal  agents  of  IJnited  States 6i5 

Government  depositaries 615 

Government  deposits  in 244 

Reserve  required  to  be  held  with,  by  banks  elsewhere  than  in  reserve 

cities 405 

Reserve  required  to  be  held  by  reserve  city  banks 406 

Reserve  required  to  be  held  by  central  reserve  city  banks 407 

Reserve,  withdrawal  of,  by  member  banks 409 

Special  examination  of  member  banks  may  be  ordered  by 527 

Statements  and  reports  by 440 

Treasury  gold  notes  may  be  obtained  in  exchange  for  certain  United  States 

bonds 318 

United  States  bonds,  purchase  of,  by 316 

Federal  Reserve  Board: 

Approval  required  for  exchange  of  United  States  bonds  for  Treasury  gold 

notes 318 

Central  reserve  cities  may  be  changed  or  added  to,  by 401 

Comptroller  of  the  Currency  ex  officio  member  of 101 

Examination  of  Federal  reserve  banks  ordered  by 527 

Examiners'  salaries  fixed  by 527 

Federal  reserve  banks  may  be  required  to  purchase  United  States  bond?  by .  316 
Federal  reserve  notes  to  be  issued  by  Comptroller  of  Currency  under  the 

supervision  of 100 

Information  concerning  member  banks  to  be  furnished  by  Federal  reserve 

agents 527 

Interlocking  directorate  act  as  to  banks  and  trust  companies  to  be  enforced 

by 235 

Issue  of  Federal  reserve  notes  under  supervision  of 100 

May  change  or  add  to  central  reserve  cities 401 

Permission  for  member  bank  to  secure  discounts  for  nonmember  banks  may 

be  granted  by 408 

Reduction  of  capital  to  be  approved  by 230 

Reserve  cities  may  be  changed  or  added  to  by 401 

Reserve  withdrawals  under  regulations  by -10!) 

Special  examination  of  member  l^anks  to  be  approved  by 527 

Statement?  and  reports  from  Federal  reserve  banks  and  member  banks  may 

be  reouired  bv 440 


240  INDEX   TO    NATIONAL-BANK   ACT,  ETC. 

Federal  reserve  notes:  Paragraph. 

Comptroller  of  Cunency  to  issue,  under  supervision  of  Federal  Reserve 

Board 100 

Execution  of  laws  relating  to 100 

I  ssue  of 317 

Federal  Trade  Commission,  enforcement  of  part  of  interlocking  directorate  act 

by 235 

Fees  {see  Examiners;  Receivers),  protesting  circulation 519 

Fees  not  to  be  paid  officers,  directors,  or  employees  of  member  bank 438 

Piftb-Third  National  Bank,  Cincinnati,  Ohio,  charter  number  changed 802 

Filling  vacancies 237 

Fine.    {See  Penalty.) 

Firm.     {See  Liability  of  association.) 

First  lien,  United  States  has,  on  all  assets 511 

Fiscal  agents  {see  Agent;  Government  depositaries).  Federal  reserve  banks  as..  615 

Five  per  cent  redemption  fund 414 

Not  counted  as  reserve 412 

Foreign  branches,  national  banks  may  establish 210 

Foreign  coins  not  legal  tender 719 

Issue  of  certificates  on  gold 754 

Forfeiture  of  bonds  when  association  refuses  to  redeem  circulation 508 

Forfeiture  of  charter,  suit  to  be  brought  for,  by  Comptroller  of  the  Currency 526 

Forged  signatures  on  bank  notes  not  to  prevent  redemption  of 417 

Forgery  of  United  States  securities 740 

Formation  of  national  banking  associations 201 

Form  of  report  of  condition 440 

Franchise,  forfeiture  of 526 

Fraudulent  notes.  United  States  and  national-bank  officers  to  mark 748 

Furniture  for  Currency  Bureau 108 


INDEX   TO    NATIONAL-BANK   ACT,   ETO.  241 


G. 

Paragraph. 

Gain  from  failure  to  redeem  circulation  of  extended  banks 220 

General  fund  of  United  States  may  be  deposited  in  Federal  reserve  banks.  .  . .  615 

Gifts,  not  to  be  made  to  officer,  director,  or  employee  of  member  bank 438 

Gold: 

Banks  not  required  to  take  circulation  of  other  banks  at  par 421 

Certificates  not  to  be  issued  when  reserve  of  gold  coin  and  bullion  is  depleted .  754 

Certificates,  when  part  of  national-bank  reserve 433 

Circulation  of  gold  banks  redeemable  in 341 

Deposit  of,  for  certificates 433,  754 

Dollar,  standard  unit  of  value 749 

Issue  of  certificates  of  deposit  of 433,  754 

Organization  of  gold  banks 341 

Reserve  of  one  hundred  and  fifty  millions 750 

Reserve  of  gold  banks  to  be  silver  and 342 

Taxation  of,  gold  certificates,  etc.,  by  State 717 

Gold  banks: 

Circulation  of,  issuable 341 

Conversion  of 343 

Deposit  of  bonds  by 341 

Exempted  from  provisions  relative  to  other  bank  circulation 421 

Organization  of 341 

Reserve  required  for 342,  401 

Tax  on  circulation 444 

Gold  bank  notes 341 

Gold  certificates: 

Deposit  of  gold  for _. 729,  754 

Deposit  of  foreign  gold  coin  for 754 

Issue  of,  prohibited,  when 729 

Minimum  denominations 729,  754 

Payable  to  order 754 

Receivable  for 433,719,754 

Gold  coins: 

Foreign,  not  legal  tender 719 

United  States,  legal  tender 720 

United  States,  legal  tender  in  Philippine  Islands 719 

Gold  notes,  issue  of,  in  exchange  for  certain  United  States  bonds 318 

Gold  reserve  in  Treasury,  gold  certificates  not  to  be  issued  when  depleted 754 

Government  deposits 615 

Government  depositaries: 

Deposit  and  withdrawal  of  public  moneys 730 

Deposits  by  certain  postmasters 731 

Designation  and  duties  of 243 

Federal  reserve  bank  as 244 

National  banks  as 243 

National-bank  circulation  to  be  received  by 243 

National  banks  as  financial  agents  of  the  Government 243 

Penalty  for  misapplication  of  money-order  funds 732 

Penalty  for  unauthorized  deposit  of  public  moneys 737 

Penalty  for  unauthorized  receipt  or  use  of  public  moneys 738 

Reserves  on.     (See  Federal  Reserve  act,  pur.  G19.) 

Secretary  of  the  Treasury  to  designate 243 

Securities  to  be  deposited  by 243 

Government's  funds  to  be  deposited,  where *>15 

Gratuity — Bank  not  to  grant  gratuity  to  any  national-bank  examiner 4:'^8a 

Guaranty  law : 

Kansas 301 

Oklahoma -'^^0 

Guaranty  of  deposits  by  national  banks - 903 

Guaranty  of  solvency  of  bank ^^2 

Guardian,  power  of  national  bank  to  act  as 208 

Guardians,  not  personally  liable 242 

1G4312°— 20 16 


242  INDEX    TO    NATIONAL-BANK   ACT,    ETC. 


H. 

Hawaii:  ^  Paragi-apli, 

National  banking  laws  applicable  to 801 

Reserve  requirements,  etc. ,  for  national  banks  in 411 

House  of  Representatives,  Comptroller's  report  to  be  sent  to 112 

Hypothecation: 

Of  capital  stock  by  directors  restricted 233 

Of  circulation  prohibited 428 

Of  stock  by  directors,  prohibited 236 


INDEX   TO    XATIONAL-BANK   ACT,   ETC.  243 


1. 

Paragraph. 

Illegal  preference  of  creditors 529 

Illegal  use  of  title  "National " 530 

Impairment  of  capital,  assessment  for 430 

Import-s  and  internal  taxes,  duties  on.  may  be  paid  by  certified  check 769,  770 

Incomplete  circulation  (see  also  Circulation);  Redemption  of 417 

Increa.'^e  of  capital 228,  229,  304 

Individual  liability,  enforcement  of 515 

Individual  liability  of  shareholders 240 

Information  concerning  member  banks  to  be  furnished  Federal  Reserve  Board 

by  Federal  reserve  agent 527 

Injunction.     {See  Comptroller;  Suits.) 
Insolvency: 

Assets,  distribution  of,  by  receiver 517 

Expenses  incident  to.  report  of Ill 

Funds  of,  where  deposited 515 

Impairment  of  capital 430 

Jurisdiction  of  courts  to  enjoin  Comptroller 701 

Jurisdiction  of  national-bank  cases 214,  218 

Notice  to  creditors  of  associations  in 516 

Penalty  for  issuing  circulation  of  associations  in 747 

Preference  of  creditors 529 

Receiver,  appointment  of 515 

Receiver,  duties  of 515 

Receiver,  when  may  be  appointed 51 5,  520 

Redemption  of  circulation  of  associations  in 505 

Shareholders'  agent 522 

Taxes  on  banks  in,  remitted 450,  715 

Inspection  of  list  of  shareholders 439 

Installments,  capital  stock  may  be  paid  in 226 

Installments,  failiu-e  to  pay 227 

Insiu"ance  agent,  when  national  bank  may  act  as  agent  for  insurance  company. .  209 

Insvu-ance  company,  insurance  of  solvency  of  bank  by 902 

Insurance  of  deposits  by  national  banks 903 

Interest-bearing  Treasury  notes  are  legal  tender 727 

Interest  in  national  banks  prohibited: 

By  Comptroller 106 

By  Deputy  Comptroller 106 

Interest.     {See  also  JJsury): 

On  bonds  deposited  with  Treasurer 311 

Rate  of,  chargeable  by  national  banks 422 

Interlocking  directorates,  when  forbidden 234,  235 

Internal  Revenue,  Commissioner  of: 

Penalty  for  failure  to  make  returns  to,  of  taxable  circulation 712 

Remission  of  tax  against  insolvent  State  banks 450,  715 

Semiannual  retiu-n  to.  of  taxable  circulation  other  than  national 711 

Internal  taxes,  certified  checks  receivable  for,  under  certain  conditions 770 

International  bimetalism,  act  March  14,  1900,  relative  to 762 

Interstate  Commerce  Commission,  enforcement  of  act  in  reference  to  interlock- 
ing directorates,  as  to  common  carriers,  by 235 

Issue  and  Redemption  Di^isions  established,  Treasurer's  Ofhce 752 

Issue  of: 

Circulation  by  Comptroller  of  Currency 323 

Circulation  to  Federal  reserve  banks 317 

Gold  certificates 433 

Gold  certificates  and  gold  certificates  payable  to  order 754 

Gold  notes,  provision  for 34 1 

Notes  under  |5  limited 329 

Post  notes,  etc. ,  prohibited 338 

Silver  certificates 755 

Treasury  gold  notes  in  exchange  for  certain  United  Statci  bonds 318 

Issuing  circulation  of  expired  associations,  penalty  for 747 

Isthmian  Canal  Commission,  estimate  of  cost  of  Panama  Canal 767 


244  INDEX   TO   NATIONAL-BANK  ACTj  ETC. 


J. 

Judgment  (see  also  Suits):  Paragraph, 

Appointment  of  receiver  when  judgment  obta,ined  against  bank 520 

Illegal  preference  of  creditors : 529 

Jurisdiction  {see  Crimes  J  lurisdiction,  etc.)  of  suits  by  or  against  national  banks.  218,  423 


K. 

Kansas,  deposits  guaranty  law 901 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  245 


li. 

Larceny.     (See  Crimea,  juriadiction,  etc.) 

Lawful  money:  Paragraph. 

Defined 342, 414 

Defined  for  gold  banks 342 

Deposit  of,  to  retire  United  States  bond-secm'ed  circulation 312,  313,  314 

Exemption  of  circulation  from  taxation,  when,  deposited 706 

Expiring  associations  to  deposit 221 

Extended  banks  to  deposit 220 

Five  per  cent  fund 414,416 

Forfeiture  of  bonds  for  failure  to  redeem  circulation  in 508 

Limit  of  amount,  to  be  deposited  monthly 314 

Liquidating  associations  to  deposit 502 

Liquidating  associations,  consolidating  not  to  deposit 503 

Payment  of  protested  circulation  in 510 

Protest  of  circulation  for  failure  to  redeem  in 507 

Receiver  to  be  appointed  for  failure  to  maintain  reserve  of 402 

Redemption  account,  disposition  of 416 

Reserve  to  be 402 

Withdrawing  circulation,  deposit  of 312,  313,  314,  414 

Lawful-money  reserve,  determined  by  deposits 342,  410 

Legal-tender  coins,  Philippine  Islands 719 

Legal  tender: 

Foreign  coins  not  accepted  as 719 

Gold  coins 720 

Minor  coins 724 

Silver  dollars 722,  751 

Subsidiary  silver  coins 723 

United  States  notes 725,  726,  727 

Liability: 

Association's,  for  pledging,  etc.,  United  States  notes,  etc 432 

Converted  State  bank,  for  old  notes 713 

Creditor's  bill  against  shareholders 521 

Enforcement  of  individual,  by  receiver 515 

Estates  owning  stock  subject  to 242 

False  certification  of  checks 434 

Individual,  of  directors 526 

Individual,  of  shareholders 240 

Limited  to  amount  of  capital,  except 427 

Of  stockholders  who  have  transferred  their  shares 241 

Shareholder's,  debars  from  voting 231 

Shareholders  of  certain  banks  exempt  from 240 

Trustees,  exempt  from,  when 242 

Liabilities: 

Associations  organized  under  the  act  of  February  25,  1863 247 

Change  of  title  or  location  not  to  affect 212,  213 

Comptroller's  annual  report  to  contain  statement  of  national  banks 110 

Converted  State  banks 713 

Deficiency  in  reserve  not  to  increase 402 

Deposit  of  lawful  money  relieves  from,  on  circulation 504 

Duties  of  receiver 515 

Exceptions  to  limitation 427 

Extended  associations 218 

Incurred  under  provisions  of  Federal  reserve  act,  not  considered  borrowed 

money 427 

Limit  of,  for  national  banks 427 

Liquidating  associations,  on  consolidation ?>0:l 

Loans,  restrictions  on 425 

Reports  of  condition  to  show 440 

Restrictions  on 427 

Statements  of  condition  to  show 440 

To  stockholders  for  unpaid  dividends  not  considered  borroweil  mimey 427 

Lien,  United  States  has  paramount,  on  assets  of  association 611, 769 


246  INDEX   TO    NATIONAL-BANK   ACT,   ETC. 

Limitations:  Paragraph. 

Associations,  corporate  existence 204 

Bonds,  vrithdrawal  of 311,  312 

Borrowed  money  not  to  exceed  capital 427 

Capital,  converted  State  banks 245 

Capital  stock^ 

Increase  of 228,  229 

Payment  of .  . 226 

Reduction  of 230 

Requisite  amount  of 224 

Circulation — 

Denominations 324 

Deposit  of  lawful  money  on  withdrawing 312 

Exempt  from  tax,  when 706 

Obtainable 323 

Obtainable  by  gold  banks 341 

Tax  on 444,  714 

To  be  taken  at  par 421 

Unauthorized,  tax  on 708-710 

Corporate  existence  of  converted  gold  banks 343 

Creditors  of  insolvent  banks,  notice  to 516 

Creditors  of  insolvent  banks,  illegal  preference 529 

Directors,  number  of 232 

Dividends 424,  429 

Expiration  of  corporate  existence 221 

Extension  of  corporate  existence 215,  222 

Gold  certificates,  denominations  of 433 

Impairment  of  capital 430 

Interest  rate _    , . .       422 

Isssue  of  notes  under  $5 329 

Jurisdiction,  general,  of  national-bank  cases 214,  2l8,  701 

Lawful  money  deposited  to  retire  circulation 313 

Liability  of  national  banks 427 

Location  of  associations,  change  of 211 

Loans  to  one  individual,  etc 425 

"National,"  in  title  of  bank 530 

Place  of  business 400 

PubUc  depositaries 243 

Real  estate  holdings 223 

Reserve,  gold  banks 342 

Receiver,  appointment  of 520 

Receiver,  purchase  of  property  to  protect  trust 523 

Reports  of  condition,  transmitted 440 

Reports  of  earnings  and  dividends,  transmitted 442 

Reserve  requirements 402 

Reserve  with  central  reserve  agents 401,  405,  406 

Reserve  with  Federal  reserve  banks 405 

Reserve  with  reserve  agents 402, 405 

Shareholders,  personal  lial>ility  of 240 

Shareholders,  personal  liability  of  shareholders  of  certain  converted  banks. .      240 

Shares  of  stock,  par  value 225 

Shares  of  stock,  directors  to  own 233 

State  taxation  of  money 717 

State  taxation  of  national  banks 451 

Stock  purchased  or  acquired 426 

Suits,  conduct  of 700 

Time  for  which  own  stock  taken  for  debt  may  be  held 426 

Time  in  which  recovery  may  be  made  for  usurious  interest  charges 423 

United  States  bonds  deposited 302 

Visitorial  powers 528 

Voluntary  liquidation,  vote 500 

Voluntary  liquidation,  deposit  of  lawful  money 502 

Voters  at  elections 231 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  247 

Liquidation:  Paragraph. 

Bonds  withdrawn 504 

Creditor's  bill  against  shareholders 521 

Consolidation 503 

Expiring  associations  to  comply  with  provisions  for 221 

Lawful  money  to  be  deposited 502 

Notice  of,  to  be  published 501 

Penalty  for  issuing  circulation  of  associations  in 747 

Redemption  of  circulation  of  associations  in 505,  506 

Sale  of  bonds,  when 504 

Vote  required 500 

Liquidation  and  receivership  {see  also  Iif|uidation;  Receiver): 

Bonds,  deficiency  in,  first  lien  on  assets  for  redemption  of  circulation 511 

Bonds,  forfeiture  of 508 

Bonds,  sale  of,  at  auction 511 

Bonds,  sale  of,  privately 512 

Bonds,  withdrawal  of 504 

Charter,  forfeiture  of 526 

Circulation ,  protest  of 507 

Consolidation,  provisions  for 503 

Creditor's  bill  against  sharehold?rs 521 

Deposit  of  collections  by  receiver 515 

Deposit  of  lawful  money  on  liquidation 502 

Distribution  of  assets  of  insolvent  associations 517 

Enjoining  proceedings 518 

Enjoining  proceedings,  where  brought 702 

Expiring  associations 221 

Illegal  preference  of  creditors 529 

Jurisdiction,  general,  of  national-bank  cases 214 

Jurisdiction  of  district  courts 701 

Notice  of  vote  to  Liquidate 501 

Notice  to  creditors  of  insolvent  associations 516 

Notice  to  present  circulation  for  redemption 510 

Penalty  for  issuing  circulation  of  expired  associations 747 

Receiver,  appointment  of 515 

Receiver,  purchase  of  property  to  protect  trust o2:i 

Receiver,  when  may  be  appointed 520 

Receivership,  expenses  of 519 

Shareholders'  agent,  appointment  of 522 

Shareholders'  agent,  duties  of 522 

Suits,  conduct  of 700 

Suspension  of  business  for  nonpayment  of  circulation 509 

Taxes  on  insolvent  associations  remitted 450,  715 

Vote  required  for  liquidation 500 

List  of  shareholders 439 

Loans : 

Associations'  liability  restricted 427 

Bank  not  to  grant  loan  to  any  national  bank  examiner 438a 

Circulation  as  collateral  for,  restricted 428 

Limitation  of,  to  one  individual,  etc 425 

No  officer,  director,  or  employee  to  receive  any  commission  for  any  loan. .  438c 

On  farm  lands 205,  223 

Prohibited  on  security  of  own  stock 426 

Prohibited  when  reserve  is  short 409 

Real  estate,  prohibited 223 

Location  (see  also  Title  and  location): 

Change  of 21 1,  R()3 

Of  banking  house -'OO 

Organization  certificate,  to  state 202 

Losses,  bad  debts  and,  to  be  deducted  from  profits  before  declaring  dividend . .  429 

Lost  or  stolen  national-bank  notes,  redemption  of 417 


248  INDEX   TO   NATIONAL-BANK  ACT,  ETC. 


M. 

Maii-eration;  ^  Paragraph. 

Redeemed  circulation  to  be  disposed  of  by 340 

Redeemed  circulation  of  failed  and  liquidated  banks  to  be  disposed  of  by .  506 

Management  by  directors 232 

Maximum.     (See  Bonds;  Capital;  Circulation;  Limitations.) 

May  change  name  and  location,  how 211 

Meetings,  annual 232 

Member  bank  examiners 527 

Member  banks: 

Depositaries  of  United  States 615 

Examinations  by  Federal  Reserve  Board 527 

Limit  to  deposit  that  may  be  kept  with  nonmember  bank 408 

Officer,  director,  or  employee  not  to  receive  any  fee,  commission,  etc 438 

Prohibited  from  securing  discounts  from  Federal  reserve  banks  for  non- 
member  banks 408 

Pro\'isions  for  national  banks  outside  of  continental  United  States  to  become  411 

Reserve  requirements 403-412^13 

Reserve,  withdrawal  of,  from  Federal  reserve  banks 409 

Statement  and  reports  by 441 

Method  of  refunding  United  States  bonds  as  permitted  by  Federal  reserve  act.  316 

Minimum  (see  Bonds;  Capital;  Circulation;  Limitation)  amount  of  capital 224 

Minor  coins: 

Philippine  Islands,  legal  tender 719 

United  States,  when  legal  tender 724 

Misapplication : 

Money-order  funds 732 

Penalty  for 436 

Misdemeanor.     (See  Crimes;  Penalty;  Official  malfeasance.) 

Money-order  funds,  misapplication  of 732 

Moneys.     (See  Lawful  money;  Legal  tender;  Circulation;  Public  moneys.) 

Monthly  installments,  capital  may  be  paid  in 226 

Mortgages: 

Assignment  of,  when  illegal 529 

Assignment,  when  official  malfeasance 436 

Real  estate,  possession,  etc. ,  of,  by  association 223 

Mutilated,  circulation  of  failed  and  liquidated  to  be 506 

Mutilated  or  worn  circulation,  redemption  of 339,414 


INDEX   TO    NATIONAL-BANK   ACT,   ETO.  249 


N. 

Paragraph. 

Name,  change  of,  by  national  bank 211,  803 

Name  of  association  to  be  approved  of  by  Comptroller  of  Currency 202 

National,  use  of  the  word,  in  titles  of  associations  other  than  national,  prohibited.  530 
National -bank  act: 

Authority  for  title 200 

Provides  for  a  national  currency,  etc 200 

Status  of  national  banks  organized  under  the  act  of  February  25,  1863 247 

National -bank  examiners 527 

National  Banking  Association  defined 300 

National  Banking  Associations: 

Acceptance  of  drafts  and  bills  of  exchange 206 

Amendment  of  articles  of  association  restricted 225 

Articles  of  association  entered  into  by 201 

Borrowed  money  restricted 427 

Branches  may  be  retained  by  converted  State  banks 246 

Capital  required 224 

Cancellation  of  redeemed  circulation 514 

Certificate  of  officers  and  directors 319 

Change  of  name  and  location 803 

Change  of  title  and  location 211-213 

Charter  forfeiture 526 

Charter  number  to  be  printed  on  circulation  of 325 

Circulation  obtainable  by .- 323 

Circulation  of,  tax  on 444-450,  717 

Circulation  of,  to  be  redeemed  in  United  States  notes 414 

Circulation  to  be  taken  at  par 421 

Circulation  of,  for  what  receivable 337 

Circulation  unsigned  or  with  forged  signatures  to  be  redeemed 417 

Closed  bank  circulation 505,  506 

Comptroller  and  Deputy  Comptroller  not  to  be  interested  in,  issuing  circu- 
lation   106 

Consolidation,  no  deposit  required  for  circulation  of  liquidated  banks 503 

Conversion  of  State  banks  into 245 

Corporate  and  incidental  powers  of 204 

Defined 300 

Depositaries  of  public  money 243 

Deposit  of  bonds  by.  requirement  repealed 302 

Directors  of,  individually  liable,  when 526 

Directors,  number  and  election  of 232 

Directors,  oath  of 236 

Directors,  qualifications  of 233 

Election,  holding  annual 232,  238 

Enjoining  proceedings 518 

Examination  of,  prior  to  being  authorized  to  begin  business 319,  320 

Examiners  of 527 

Excepted  from  certain  taxes  on  circulation 714 

Expiration  of  corporate  existence,  provisions  on 221 

Extended  bank  circulation 220 

Exchange  of  bonds 305 

Extension  of  corporate  existence  of 215,  217 

Foreign  branches 210 

General  provisions  respecting  bonds 311 

Gold  bank  circulation,  provisions  for  issuing 341 

Gold  banks  may  be  organized 34 1 

Gold  banks,  conversion  of 343 

Increase  of  capital  stock  by 228,  229 

Insurance  or  guaranty  <>f  deposits  by 903 

Lending  on  own  stock  prohibited 426 


250  INDEX    TO    NATIONAL-BANK   ACT,   ETC. 

National  Banking  Associations — Continued.  Paragraph. 

Liquidating  bank  circulation 502-506 

Liquidation,  provisions  for 500-504 

Loans  on  farm  landa 205 

Loit  or  stolen  notes  of,  to  be  redeemed 417 

Not  required  to  deposit  United  States  bonds 302 

Organization  certificate  to  specifically  state 202 

Payment  of  stock  prior  to  beginning  "business 226 

Place  of  business 400 

Political  contributions  prohibited 437 

Post  notes,  issue  of,  prohibited 338 

Power  to  act  as  trustee,  administrator,  executor,  or  registrar  of  stocks  and 

bonds 208 

Power  to  insure  solvency  of  bank 902 

Preparation  of  bank  circulation 324 

President  of,  to  be  chosen  by  board 239 

Publication  of  certificate  of  authority 321 

Purchasing  own  stock  prohibited 426 

Receiver  may  be  appointed  for  failure  to  restore  capital 227 

Reduction  of  capital  stock 230 

Receiver  for,  when  may  be  appointed 520 

Redemption  and  destruction  of  circulation  of 339,  340,  414 

Redemption  account,  disposition  of 416 

Regulation  of  business  of 400 

Relation  of  bond  deposit  to  capital  of 304 

Reserve  requirements 403-412 

Reserve  requirements  outside  of  continental  United  States 411 

Security  for  circulation 302.  303 

Shares  of  stock 225 

Shareholders  of,  qualifications  of,  at  election 231 

Shareholders'  agent 522 

Shareholders  of,  personally  liable 240 

Shareholders  of,  when  not  personally  liable 240 

Status  of,  organized  under  the  act  of  February  25,  1863 247 

Subscribed  stock  not  paid  for,  forfeited  to 227 

Suspension  of  business  after  default  to  pay  circulation 509 

Taxation  of  circulation  of,  by  States,  etc 716,  717 

Tax  provisions  restricted 714 

Taxes  on  insolvent,  remitted 450,  715 

Transfer  of  shares  of  stock 241 

Where  proceedings  to  enjoin  must  be  brought 702 

Withdrawing  circulation 312,  313,  314 

National  banks  deemed  citizens  of  States  in  which  located 214 

National  banking  laws  applicable  to  Hawaii 801 

National  banking  laws  applicable  to  Porto  Rico 800 

National-bank  notes  obligations  of  the  United  States 739 

National-bank  notes,  penalty  for  counterfeiting 714 

Newspaper: 

Certificate  of  authority  to  commence  business  to  be  published  in 321 

Election  notice  to  be  given  in 238 

Impairment  of  capital,  notice  to  be  published  in 430 

Liquidation  notice  to  be  published  in 501 

Notice  of  meeting  to  elect  shareholders'  agent  to  be  published  in 522 

Notice  to  creditors  of  insolvent  banks  to  be  advertised  in 516 

Reports  of  condition  to  be  published  in 440 

Sale  of  stock  of  delinquent  shareholders  to  be  published  in 227 

New  York  City: 

Associations  in,  reserve  agents 402.  420 

Bonds  of  liquidated  banks  that  failed  to  make  deposit,  to  be  sold  in 504 

Bonds,  sale  of  forfeited,  in 511 

Designated  as  central  reserve  city 401 

Notice  of  expiration  of  corporate  existence  to  be  published  in  paper  in 221 

Notice  of  voluntary  liquidation  to  be  published  in  paper  in 501 

Met  profits,     (See  Dividefida.) 


INDEX    TO    NATIONAL-BANK   ACT.   ETC.  251 

Nonmember  banks:  Paragraph. 

Amount  of  deposit  that  may  be  kept  with,  by  member  banks,  restricted .  .  408 

Discounts  from  Federal  reserve  banks  not  allowed  through  member  banks. .  408 

Reserve  requirements  for  national  banks  that  are 411 

Nonresidents: 

Directors 233 

State,  etc. ,  taxation  of  stock  of 451 

No  release  from  liabilities  by  change  of  title  or  location 213 

Notary  public: 

Acknowledgment  of  organization  certificate  before 203 

Acknowledgment  of  reports 440-442 

Protest  of  circulation  by  507 

Notes  {see  Circulation)  of  the  United  States  are  legal  tender 725-727 

Notice  {see  Publication;  Printing): 

Creditors  of  insolvent  banks  to  present  claim 516 

Of  election 238 

Of  sale  of  bonds 511 

Of  transfer  of  bonds  to  be  given  association 308 

To  present  circulation  for  redemption  when  bonds  have  been  forfeited 510 

Notification  of  redemption  of  circulation  by  United  States  Treasurer 414 

Number  of: 

Central  reserve  cities 401 

Copies  of  annual  report 112,  113 

Examinations  to  be  made 527 

Reports  of  condition  that  may  be  called  for 440 

Null  and  void ,  illegal  preference 529 


252  INDEX   TO   NATIONAL-BANK   ACT,  ETC. 


O. 

Oath:  Paragraph. 

Certificate  of  officers  and  directors 226, 319 

Directors 236 

Examiners  may  take  statement  under 527 

Execution  of  organization  certificate 203,  245 

Official,  by  Comptroller 102 

Official,  by  Deputy  Comptroller 103 

Payment  of  installments 226 

Reports  of  condition,  and  earnings  and  dividends 440-442 

Semiannual  return  of  circulation 446 

Shareholders,  list  of 439 

Obligations  of  the  United  States: 

Defined 739 

Exempt  from  taxation 716 

Penalty  for — 

DeaUng  in  counterfeit 746 

Illegal  possession  or  use  of  material  for 742 

Passing  counterfeit 743 

Pledging 432 

Taking  or  having  unauthorized  impression  of  tools,  etc 745,  746 

Office  force  for  redemption  of  circulation 415 

Officers  {see  also  President;  Cashier): 

Bonds  assigned  to  be  signed  by  cashier  or  other 306 

Certificate  of  directors  and 319 

Certificate  of  pajonent  of  increase  of  stock 228 

Certification  of  payment  of  stock  by  president  or  cashier 226 

Circulation  properly  signed  by,  issuable 337 

Disqualified  to  examine  national  banking  associations  in  which  interested 

as 527 

Election  or  appointment  of,  by  directors 204 

Examination  of,  under  oath 527 

False  certification  of  checks,  forbidden 434 

Forfeiture  of  charter,  pro\'isions  for 526 

Forged  signatures  of,  to  circulation,  not  to  invalidate 417 

Fraudulent  notes  to  be  marked  by 748 

Interest  rate  of  paid  officers 438e 

Oath,  administration  of,  to  reports 441 

Official  malfeasance,  penalty  for 436 

Penalty  for  false  certiication  of  checks 435 

Penalty  for  improperly  countersigned,  etc.,  circulation 344 

Penalty  for  issuing  circulation  of  expired  associations 747 

Penalty  for  official  malfeasance 436 

Penalty  for  pledging,  etc.,  circulation 432 

Penalty  for  political  contributions 437 

Penalty  for  receiving  commission  for  a  loan 438c 

Penalty  for  unauthorized  receipt  of  public  money 738 

Preference  of  creditors 529 

President  of  board  a  director 239 

President  or  cashier — 

Certification  of  extension 216 

Certification  of  expiration  of  existence 221 

Certification  of  liquidation 501 

Waiving  notice  of  protest 507 

President  or  vice  president  and  cashier  to  sign  circulation 324 

Proxy,  not  to  act  as 231 

Receiver,  appointment  of,  for  violation  of  national-bank  act  by 520 

Redemption  of  unsigned  circulation 415 

Reports  of  condition,  verification  of,  by  president  or  cashier 440,  441 

Reports  of  earnings  and  dividends,  attestation  of,  by  president  or  cashier  . .  442 

Shareholders '  lists  verified  by  president  or  cashier 439 

Taxation,  circulation  subject  to,  returns  by  president  or  cashier. 446 

Taxation,  unauthorized  circulation,  returns  by  president  or  cashier 711 

Officers,  United  States: 

Deposit  and  withdrawal  of  public  money 730 

Penalty  for  improper  countersigning  or  delivering  circulation 344 

Penalty  for  unauthorized  deposit  of  public  money 737 

Receiving  or  disbursing  public  money  to  mark  fraudulent 748 

Offices,  vaults,  e'ic,  assignment  of,  to  the  Comptroller  by  the  Secretary 108 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  253 

Official:  Paragraph. 

Malfeasance,  penalty  for 43^ 

Register,  information  for m 

Seal  of  Comptroller  of  the  Currency 107 

Oklahoma,  deposit  guaranty  law 900 

Organization  and  powers  of  national  banks: 

Amendment  of  articles  of  association 225 

Articles  of  association 201 

Branches  of  converted  State  banks 246 

Capital  stock 202 

Capital  stock  requirements 224 

Certificate  of  authority  to  begin  business '  320 

Certificate  of  officers  and  directors 319 

Change  in  title  and  location 211 

Conversion  of  gold  banks 343 

Conversion  of  State  banks 245 

Corporate  powers 204 

Deposit  of  bonds 302 

Directors,  election  of 238 

Directors,  number  and  election  of 232 

Directors,  oath  of 236 

Directors,  qualification  of 233 

Directors,  to  choose  president 239 

Directors,  vacancy,  how  filled 237 

Enforcing  payment  of  stock 227 

Examination  preliminary  to  beginning  business 319 

Execution  of  organization  certificate 203 

Extension  of  corporate  existence 215 

Failure  to  hold  election 238 

Gold  banks,  conversion  of 343 

Gold  banks,  organization  of 341 

Incidental  powers 204 

Increase  of  capital  stock,  provisions  for 228.  229 

Increase  of  capital  stock,  when  vaUd 228 

Liquidation 500 

Location  and  title,  change  of 211 

Location 202 

Organization  certificate 202 

Payment  of  stock 226 

President,  election  of,  by  board 239 

President,  qualification  of 239 

Publication  of  certificate  of  authority  to  begin  business 321 

Reduction  of  capital  stock,  pro^dsions  for 230 

Restoration  of  capital  stock 227 

Shareholders 202 

Shareholders,  personal  liability  of 240 

Shareholders,  qualification  of,  at  electiop 231 

Shareholders,  when  personally  liable 240 

Shares  of  stock 225 

State  banks,  conversion  of 245 

State  banks,  converted,  may  retain  branches 246 

Status  of  associations  organized  under  act  of  Feb.  25,  1863 247 

Title 202 

Title  and  location,  change  of 211 

Vacancies  in  board,  how  filled 237 

Organization  certificate: 

Acknowledgment  of 203 

Certified  copy  of,  evidence 704 

Comptroller  to  grant  or  withhold 320 

Conversion  of  gold  banks 343 

Conversion  of  State  banks 245 

Execution  of 203 

Sealed  certificate  of  Comptroller,  evidence. .   "03 

Specifications  in 202 

Other  bonds  to  secure  deposits 243 

Other  real  estate  owned -  • 223 

Other  cities  may  be  designated  as  central  reserve  cities 401 

Other  reserve  cities.     {See  Reserve  cities.) 

Overdue  paper "^^ 


254  INDEX   TO    NATIONAL-BANK   ACT^   ETC. 


P. 

Panama  Canal  bonds:  Paragraph. 

Additional  issue 767 

Available  and  nonavailable  as  security  for  circulation 303,  768 

Issued  under  act  Aug.  5,  1909,  not  receivable  as  security  for  circulation. .  768 

Tax  on  circulation  secured  by 303, 444 

Panama,  reserve  rec^uirements,  etc.,  for  national  banks  in 411 

Paper  for  printing  circulating  notes 326 

Paper  used  for  United  States  securities,  penalty  for  use  of  without  authority.. .  742 

Par,  bonds  not  to  be  sold  at  less  than 512 

Par,  national  banks  to  take  notes  of  other  national  banks  at 425 

Par  value  of  capital  stock  of  converted  State  banks 245 

Par  value  of  stock 225 

Passing  counterfeit  circulation,  penalty  for 743 

Past  due  paper 429 

Payment  of: 

Assessment  for  impaired  capital 430 

Capital  stock,  provisions  relative  to 226 

Claims  against  insolvent  banks 517 

Tax  on  circulation - 444 

Tax  on  circulation  other  than  national 710 

Payments  for: 

Purchase  of  property  by  receiver  provided  for 525 

Whidi  national  bank  notes  are  receivable 337 

Penalty: 

Appointment  of  receiver  for  violations  of  act 515,  520 

Bond  of  Comptroller 102 

Bond  of  Deputy  Controller 103, 104 

Circulating  notes  less  than  $1,  issue  of 718 

Commission,  penalty  for  receiving  commission  for  a  loan 438c 

Counterfeiting  circulation,  etc 740,  747 

Dealing  in  counterfeit  circulation 746 

Embezzlement,  abstraction,  willful  misapplication,  false  entries,  etc 436 

False  certification  of  checks ^ 435 

Failure  to  make  reports 443 

Failure  to  pay  installment  on  stock 227 

Failure  to  redeem  circulation 508 

Forfeiture  of  charter  for  violauons  of  bank  act 526 

Forging  or  counterfeiting  United  States  securities 740 

Illegal  possession  or  use  of  material  for  circulation 742 

Imitating  bank  circulation  for  advertising  purposes 345 

Improper  countersigning  or  delivering  circulation 344 

Interest,  unlawful 423 

Interlocking  directorates T 235 

Issuing  circulation  of  expired  associations 747 

Jurisdiction  of  the  United  States  courts 214,  218 

Mutilating  circulation 346 

Misapplication  of  money-order  funds 732 

"National,"  unlawful  use  of  the  word 530 

Official  malfeasance 436 

Passing  counterf ei  t  circulation 743 

Pledging  United  States  notes  or  bank  circulation 432 

Keports  to  Comptroller,  failure  to  make 443 

Reserve,  maintenance  of 402 

Reserve,  shortage «. 409 

Semiannual  return  of  circulation,  failure  to  make 446-449 

Taking  or  having  unauthorized  impression  of  tools,  etc 744,  745 

Unautliorized  deposits  of  public  money 737 

Unauthorized  receipt  or  use  of  public  money 738 

Usury 422,423 

Violations  of  any  of  the  provisions  of  the  bank  act 526 

Violations  of  section  22,  Federal  reserve  act 438f 

Period  for  which  real  estate  may  be  held 223 

Personal  liability.     (See  Shareholders;  Tnistees;  Liability.) 

Personal  property,  shares  of  stock  of  national  banks  taxed  as 451 

Philippine  Islands,  legal-tender  coins —  719 


INDEX   TO   NATIONAL-BANK   ACT,   ETC.  255 

Philippine  Islands;  Paragraph. 

Public  funds  in  the  United  States  to  be  deposited  in  member  banks 615 

Reserve  rec^uirements,  etc.,  for  national  banks  in 411 

Photographing  United  States  securities  without  authority,  penalty  for 742 

Place  of  business,  organization  certificate  to  state 202,  400 

Place  for  redemption  of  circulation 414 

Place  where  proceedings  to  enjoin  Comptroller  must  be  brought 702 

Place  where  tax  on  shares  in  national  banks  is  to  be  paid 451 

Places  where  circulation  may  be  redeemed 414 

Plates: 

Control  of 327 

Cost  of  engraving 220,  327,  414 

Custody  of 108 

Engraving  of 324 

Examination  annually 328 

Expense  of  examination  and  destruction  of 328 

Extended  banks 220 

Liquidating  bank,  to  be  destroyed 328 

Penalty  for  counterfeiting  or  having  jtossession  of  counterfeit 742,  744 

Penalty  for  taking  unauthorized  impression  of  tools,  etc 744 

Penalty  for  having  false  impressions  of  tools,  etc 745 

Pledging  or  hypothecating  circulation  prohibited 428 

Political  contributions  prohibited 437 

Population,  relation  of  capital  stock  to 224 

Porto  Rico: 

National  banking  laws  applicable  to 800 

Reserve  requirements,  etc.,  for  national  banks  in 411 

Postal  savings  funds  to  be  deposited  in  member  banks 615 

Postmasters; 

Deposit  of  public  funds  by 731 

Misapplication  of  money-order  funds  by . 732 

Postmaster  General,  deposit  of  funds  by  authority  of 732 

Post  notes,  national  banking  associations  prohibited  from  using 338 

Power: 

Comptroller  to  assess  fine  for  failure  to  make  reports 443 

Of  attorney  to  receive  interest  on  bonds 311 

Of  national  banks  to  act  as  trustee,  executor,  etc 208 

Of  national  banks  to  insure  deposits 903 

To  hold  real  property 223 

Powers  {see  also  Comptroller): 

Granted  to  national  banks 204 

Incidental,  of  national  banks 204 

Of  examiners 527 

Of  national  banks  to  insure  solvency  of  bank 902 

Receiver 515. 523 

Shareholders'  agent 522 

Trust  company,  powers  of  national  banks 208 

Visitatorial,  limitations  of 528 

Preference : 

In  allotment  of  shares  in  aucceeding  association 219 

Of  creditors  illegal 529 

Preliminary  examinations,  expense  of 519 

Preparation  of  circulation,  provisions  for 324 

President  (see  also  Officers): 

Certificate  of  officers  and  directors 319 

Certificate  of  stock  payment 319 

Countersigning  or  delivering  circulation  improperly 344 

Director  to  be 239 

Election  or  a])pointment  of,  by  directors 201. 239 

False  certification  of  checks  by,  and  penalty  for 434. 435 

Liquidating  bank,  duty  in 501 

Of  the  board,  election  of 239 

Official  malfeasance,  penalty  for " 436 

Proxy,  not  to  act  as 231 

Public  money,  unauthorized  receipt  of ,  by 738 

Reports  of  condition,  verified  by 440 

Reports  of  earnings  and  di\adends  to  be  verified  by 442 

Signature  of,  forged,  not  to  invalidate  circulation 417 


256  INDEX   TO    NATIONAL-BANK   ACT,  ETC. 

President  (see  also  Officers) — Continued.  Paragraph. 

Signature  of,  on  circulation 324,  337 

Violations  of  act,  by,  penalty  for 436,  526 

President  of  the  United  States,  appointment  of  Comptroller  by 101 

Printing: 

Annual  report  of  the  Comptroller,  number  printed  and  distribution  of. .   110-112 

Certificate  of  authority  to  begin  business 321 

Charter  number  on  circulation 325 

Circulating  notes  on  distinctive  paper 326 

Circulation  of  associations 324 

Circulation  of  extended  banks 220 

Creditors  of  insolvent  associations,  notice  to 516 

Notice  of  special  annual  election 238 

Notice  of  sale  of  delinquent  stock 227, 430 

Notice  of  sale  of  bonds  at  public  auction 511 

Notice  of  liquidation 501 

Notice  of  expiration 221 

Peralty  for  counterfeiting  circulation 741 

Penalty  for  illegal  piossession  or  use  of  material  tor  circulation 742 

Penalty  for  imitating  circulation 345 

Penalty  for  taking  or  having  unauthorized  impression  of  tools,  etc.,  for .  .  .   744,  745 

Reports  of  condition 440 

Shareholders  agent,  notice  of  election  of 522 

Voluntary  liquidation,  notice  of.  . 501 

Private  sale  of  bonds  to  secure  circulation 512 

Proceedings: 

If  shareholder  fails  to  pay  installments 227 

To  enjoin  Comptroller 701,  702 

Where  no  election  is  held  on  the  proper  day 238 

Profits,  undivided,  not  considered  borrowed  money 427 

Prohibitions: 

Borrowed  money  in  excess  of  capital 427 

Business  not  to  be  transacted  until  authorized  by  Comptroller 204 

Circulation,  pledging  of 428 

Comptroller  or  Deputy  Comptroller  from  being  interested  in  any  association 

issuing  national  currency 106 

Counterfeiting,  etc _. 740,  746 

Deposit  of  Government  money  in  banks  not  belonging  to  Federal  Reserve 

System 244 

Imitation  of  circulation 345 

Interlocking  directorates ._ 234 

Issuing  circulation  to  unauthorized  associations 344 

Loaning  on  own  stock 426 

Loans  in  excess  of  a  certain  limit 425 

Member  bank  limited  in  amount  of  deposit  with,  and  forbidden  to  secure 

discounts  from.  Federal  reserve  banks  for  nonmember  banks 408 

Mutilation  of  circulation 346 

National-bank  notes  not  to  be  used  as  security  for  loans 432 

Notes  less  than  $1 718 

Officers  of  bank  not  to  administer  oath  for  reports  of  condition 441 

Political  contributions 437 

Postmasters  not  to  receive  interest  on  deposits 731 

Posts  notes,  issue  of 338 

Public  funds  of  Philippine  Islands,  postal  savings  or  any  Government 

funds  not  to  be  deposited  in  banks  other  than  member 615 

Purchase  of  own  stock 426 

Heserve  shortage 409 

Restriction  as  to  visitatorial  powers 528 

Sale  of  bonds  for  default  of  payment  of  circulation  at  less  than  par 512 

Unauthorized  deposit  of  public  money 737 

Unauthorized  receipt  of  public  money 738 

Uncurrent  notes  not  to  be  put  in  circulation 431 

United  States  notes  not  to  be  used  as  security  for  loans 436 

Use  of  title  "National" 530 

Using  plates  to  print  notes  without  authority 742 

Usurious  rate  of  interest 422 

Voters  at  elections 231 

Withdrawal  of  capital 421 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  257 

Paragraph. 

Proof  of  publication,  report  of  condition 440 

Protest  of  circulation: 

Bonds  forfeited,  when 508 

Bonds,  sale  of,  when 51 1 .  512 

Failure  to  redeem  circulation 507 

Provisions : 

Appointment  of  receiver 51 5 

Assessment  when  bank  fails  to  make  return  on  circulation 447 

Dividends 424 

Enforcing  payment  of  tax  on  circulation 448 

Examination  of  bonds  and  records 309-311 

Excess  payment  of  tax  on  circulation,  refunding  of 449 

Federal  Tleserve  Board  to  sell  United  States  bonds  to  Federal  reserve 

banks 316 

For  changes  in  deposit  of  bonds 304 

For  deposits  by  disbursing  officers 730 

For  deposits  by  postmasters 731 

For  destruction  and  replacing  of  circulation 339,  340 

For  liquidation  of  banks  at  expiration  of  charter 221 

For  national  banks  outside  the  continental  United  States  to  become  mem- 
ber banks 411 

For  obtaining  circulation 323 

For  organization  of  gold  banks 341 

For  redeeming  circulation 414 

For  redemption  of  circulation  when  charter  is  extended 220 

For  reimbursement  of  expenses  for  redemption  of  circulation 415 

For  withdrawal  of  circulating  notes 312 

Gold  certificates,  issue  of 433 

Impairment  of  capital 430 

Inspection  of  list  of  shareholders 439 

Liquidation 500.  501 

Of  articles  of  association 201 

Of  by-laws 204 

Payment  of  tax  on  circulation 444 

Reports  of  condition 440 

Respecting  bonds,  general 311 

Retirement  of  circulation  by  sale  of  United  States  bonds 315 

Shareholders'  agent,  election  of 522 

Surplus 424 

To  be  complied  with  before  commencing  business 302.  319 

Proxies  authorized 231 

Proxies  can  vote  for  shareholders'  agent 522 

Publication  (see  also  Printing) : 

Annual  election,  notice  of  holding  special 238 

Certificate  of  authority  to  begin  business 321 

Creditors  of  insolvent  associations,  notice  to 516 

Nonpayment  of  circulation,  notice  to  present 510 

Reports  of  condition  of  national  banks 440 

Sale  of  bonds,  notice  of 511 

Sale  of  delinquent  stock,  notice  of 227, 430 

Shareholders'  agent,  notice  of  election  of 522 

Voluntary  liquidation,  notice  of 501 

Public  debt,  national-bank  circulation  receivable  for,  with  certain  exceptions.  337 
Public  deposits  (see  alio  Deposits) : 

Banks  to  ^ve  security  for 243 

Duty  of  disbursing  officers 730 

Duty  of  postmasters 731 

Postmasters 731 

Purchase  of  real  estate 223 

Public  dues,  certified  checks  receivable  for,  under  certain  conditions 770 

PubUc  sale  of  stock  purchased  from  dissenting  shareholders 219 

Pulp  from  macerated  circulation 340 

Purchasing  own  stock  prohibited 426 

Purchase  of  property  by  receiver ■'•'2-'>,  525 

Purchase  of  Umted  States  bonds  by  Federal  reserve  banks 316 

Purpose  of  organization  certificate  to  be  stated  therein 202 

iUWTJ''— 20 17 


258  INDEX    TO    NATIONAL-BANK   ACT,   ETC. 


Q. 

Qualification:  Paragraph. 

Comptroller  of  the  Currency 102 

Deputy  Comptroller 103 

Directors  of  national  banks 233 

Examiners  of  associations 527 

Shareholders'  agent 522 

Quarters  for  Currency  Bureau 108 


INDEX   TO    NATIONAL-BANK    ACT,   ETC.  259 

R. 

Rate.     [See  Interest;  Tax;  Usury.)  Paragraph. 

Kate  of  interest  which  may  be  charged 422 

"Ratio.     (See  Bonds;  Capital  and  circulation.) 

Real  estate: 

Investments  and  holdings  restricted 223 

Loans  on,  permitted  with  certain  restrictions 205 

Mortgages,  limited 223 

Subject  to  State,  etc.,  taxation 451 

Real  estate  broker,  when  national  bank  may  act  as  broker  in  procuring  loans 

on  real  estate 209 

Reassignment  of  bonds,  liquidating  bank 504 

Receipt  for  bonds  transferred 306 

Receiver: 

Appointment  and  duties  of 515 

Appointment  of — 

For  failure  to  dispose  of  own  stock 515 

For  failure  to  restore  diminished  capital 515 

For  false  certification  of  checks 515 

For  nonpayment  of  circulation 515 

For  impairment  of  capital 515 

For  insolvency 520 

For  nonmaintenance  of  reserve 515 

When  capital  reduced  by  failure  to  pay  installments 227 

Courts  may  enjoin 518 

Deposit  of  collections  by 515 

Expenses  of,  how  paid 519 

General  jurisdiction  of  national-bank  cases 214 

Jiirisdiction  of  district  courts  to  enjoin  Comptroller  or 701 

•  National  bank  as  receiver  under  trust  company  powers 208 

Purchase  of  property  by,  to  protect  trust 523 

Receiverships.     (See  Liquidation  and  receivership;  Receiver.) 

Rpcoinage  of  uncurrent  subsidiary  silver 757 

Records,  regulations  for  redemptions 513 

Red  Cross,  subscriptions  to 771 

Redeeming  circulation 414 

Redemption: 

Cancellation  of  circulation  sent  for 514 

Deposit  of  lawful  money  for,  of  associations  in  liquidation 502 

Division,  Treasurer's  Office,  established 752 

Disposition  of,  account 416 

Enjoining  Comptroller 518 

Extended  bank  circulation 220 

First  lien  on  assets 511 

Five  per  cent  fund  for— 

To  be  maintained 414 

Not  part  of  lawful  reserve 412. 414 

Forfeitiu'e  of  bonds 508 

Forged  signatures  not  to  prevent 417 

General  provisions  respecting 414 

Incomplete  circulation 417 

Issue  and  Redemption  divisions  established 752 

Lawful  money,  of  circulation 414 

Liquidating  bank  circulation 504,  505 

Lost  national-bank  notes 417 

Notice  to  present  circulation  for 510 

Of  circulating  notes  issued  prior  to  extension 220 

Of  circulation,  place  for 414 

Proceeds  from  sale  of  bonds  for,  of  circulation 504 

Profit  on  circulation  not  presented  for 220 

Protest  of  circulation,  for  failure  to  redeem 507 

Records  of 513 

Retirement  account 416 


260  INDEX   TO    NATIONAL-BANK   ACT,  ETC. 

Redemption — Continued.  ,  Paragraph. 

Sale  of  bonds 511,  512 

State  bank  circulation 706 

Stolen  national-bank  notes 417 

United  States  notes,  of  circulation,  in 414 

United  States  and  Treasury  notes,  to  be  in  gold 750 

Unsigned  circulation  to  be  redeemed 417 

Withdrawn  circulation. 312.  313 

Worn  or  mutilated  circulation 339,  340 

Redemption  account,  disposition  of 414 

Redemption  of  United  States  notes,  gold  coin  and  bullion  to  be  set  apart  as 

reserve  for 750 

Reduction  of — 

Bonds  to  secure  circulation 311 

Capital 230,  304 

Circulating  notes 313 

Reextension  of  charter 222 

Refunding — 

Bonds  under  provision  of  Federal  reserve  act 315 

Excess  payment  tax  on  circulation 449 

Of  United  States  bonds 759 

Of  United  States  bonds  under  Federal  reserve  act 315 

Register  of  the  Treasury,  signature  on  circulation 324 

Registered  bonds,  intended  by  term  "United  States  bonds  " 301 

Registered  bonds,  exchange  of  coupon  bonds  for 305 

Registrar  of  stock  and  bonds,  power  of  national  banks  to  act  as 208 

Registry  of  transfer  of  bonds 307 

Regulations  for  exchange  of  bonds 323 

Regulations  for  redemption  records 513 

Regulation  of  banking  business: 

Assessment,  enforcement  of 430 

Circulation,  improper  use  of 428 

Dividends 424 

Dividends  prohibited,  when 429 

Examiners,  appointment  of 527 

Examiners,  compensation  of 527 

Impairment  of  capital 430 

Interest,  limited 422 

Interest,  unlawful,  penalty  for 423 

Laws  governing  certain  associations 300 

Liability  of  association  restricted 427 

Loans,  restrictions  on 425 

Net  profits 424 

Place  of  business 400 

Real  estate,  purchasing,  etc 223 

Reports  of  condition 440 

Reports,  failure  to  make 443 

Reports,  verification  of 441,  442 

Reports  of  dividends  and  earnings 442 

Reserve  cities 402 

Reserve  cities,  balances  with  agents 406 

Reserve  cities,  central 401,  402 

Reserve  cities,  requirements 402 

Reserve  requirements,  gold  banks 342 

Shareholders,  list  of 439 

State  taxation  of  associations 451 

Stock,  holding,  etc 426 

Sxirplus  and  dividends 424 

Uncurrent  notes,  use  of,  prohibited 431 

Unearned  dividends  prohibited 429 

Visitatorial  powers,  limitation  of 528 

Reimbursement  (see  Circulation;  Expense;  Plates  and  dies)  of  expenses  for 

redemption  of  circulation 415 

Removal  of  Comptroller  of  the  Currency 101 

Replacing  worn-out  and  mutilated  circulation 339 


INDEX    TO    NATION AL-BANK   ACT,    ETC.  261 

Reports:  Paragraph. 

Amendments  proposed  in  Comptroller's  annual 110 

Annual,  number  to  be  printed 112.  113 

Annual,  to  be  made  to  Congre.s.s 110 

Banks' ,  other  than  national 110 

Circulation,  semiannual  return  of 446 

Closed  banks 1 10.  1 II 

Condition  of  national  banks  in  annual 110 

Distribution  of  annual 112.  113 

Dividend.s  and  earnings 442.  443 

Failure  to  make,  to  Comptroller 443 

List  of  shareholders 439 

Of  examiners 527 

Payment  of  capital  stock 226,  227 

Printed,  number  of  copies  of  annual 112,  113 

Receiver,  to  Comptroller 515 

Statement  of  condition  of  national  banks,   Federal  reserve  banks,  and 
member  banks 440.  441 

Requirements  prior  to  commencing  business 319 

Requisite: 

Amount  of  capital 224 

Qualifications  of  directors 233 

Requisites  of  organization  certificate 202 

Reser\-ation  of  rights  of  associations  organized  under  act  of  1863 247 

Reser^•e : 

Clearing-house  certificates 402 

Deposits  to  govern  amount  of 410 

Determined  by  deposits,  not  circulation 402 

Federal  reserve  banks,  that  may  be  held  with 405-407 

Five  per  cent  fund  not  counted  as 412.  414 

Gold  and  silver,  held  by  gold  banks 342 

Gold  certificates 433 

Lawful  money 402,  414 

Maintenance  of 402 

None  required  to  be  held  against  United  States  deposits 413 

On  circulation  not  required 402 

Penalty  for  failure  to  maintain 402 

Proportion  of,  with  agents 401,  405,  406 

Proportion  of,  with  Federal  reserve  bank 405 

Requirements 402-412 

Required  to  be  held  with  Federal  reserve  bank 407 

Requirements  for  gold  banks 342 

Silver  certificates 729 

Withdrawal  of,  from  Federal  reserve  bank 409 

Reserve  agents  (««€  afeo  Agent),  balance  with 401,  405.  406 

Reserv^e  cities: 

Additional,  provisions  for 401,  402 

Cash  reserve  required 406 

Central,  deposits  in 401, 402, 405,  406 

Central,  provisions  for 401 

Classification  of 402 

Designation  of 402 

Distribution  of  reserve  to  be  held  by  banks  in 406 

Names  of 402 

Requirements,  not  applicable  to  gold  banks  in  San  Francisco 401 

Requirements  of  associations  in 402,  406 

Reserve  requirements 406 

Reserve  that  may  be  held  with,  by  banks  elsewhere  than  in  reserve  cities  . . .       405 

Reserve  requirements: 

Banks  not  in  reserve  or  central  reserve  cities 405 

Central  reserve  cities 401.  407 

Country  banks 405 

Estimate  of 410 

Five  per  cent  redemption  fund  not  counted  as  reserve 412 

How  estimated ■*  1*^ 

Reserve  cities  other  than  central 402,  406 

When  effective 404 


262  INDEX   TO    NATIONAL-BANK   ACT,   ETC. 

Residences:  Paragraph. 

List  of  shareholders  and,  reported  annually 439 

List  of  shareholders  and,  in  organization  certificate 202 

National  ban'cs 214 

Qualifications  of  directors  of  associations 233 

Resources.     (See  Assets.) 

Restoration  of  capital  stock,  provisions  for 227, 430 

Restrictions: 

Amount  of  lawful  money  that  may  be  deposited  to  withdraw  circulation. .  314 

Gold  certificates,  issue  of 729 

Notes  less  than  $1 718 

On  banks'  indebtedness 427 

On  loans 425 

State  tax  on  national-bank  shares 451 

Tax  on  circulation 714 

Upon  use  of  circulating  notes 428 

Visitatorial  powers  limited 528 

Resumption  of  specie  payments 329 

Retirement  account,  circulation  for  which  deposits  made  to  redeem 416 

Retirement  of: 

Circulating  notes 313 

Circulation  by  deposit  of  lawful  money 314 

Circulation  by  sale  of  L'nited  States  bonds 315 

Retiring  circulation  under  provisions  of  Federal  reserve  act 315 

Returns.     (5ee  Circulation;  Reports;  Taxation.) 

Right  of  shareholders  to  vote 231 

Rooms,  vaults,  and  furnitiure  for  Currency  Bureau 108 


INDEX   TO   NATIOXAL-BANK    ACT,   ETC.  263 

s. 

Paragraph. 

St.  Looiis  designated  as  a  central  reserve  city 401 

Salaries  of  examiners 527 

Sale: 

Assets  of  insolvent  association,  by  receiver 515 

Assets  of  insolvent  associations,  by  shareholders'  agent 522 

Bonds,  for  failure  to  redeem  circulation 504,  508,  511,  512 

Of  stock  purchased  from  dissenting  shareholders '  219 

Stock,  for  delincjuent  payment  of  installment 227 

Stock,  for  impairment  of  capital 4.30 

Stock  taken  for  debt 426 

Savings  accounts  as  time  deposits 403 

Savings  banks,  statements  to  be  given  in  annual  report 110 

Seal,  power  of  association  to  adopt  and  use 204 

Seal  of  Office  of  Comptroller: 

Certified  copy  of  organization  certificate  under,  evidence 704 

Certificates  under,  competent  evidence 703 

Description,  impression  of,  and  certificate  of  approval  by  Secretary'  of  the 

Treasury-,  to  be  filed  with  the  Secretary  of  State 107 

Devised  by  Comptroller  and  approved  by  Secretary 107 

Secretary  of  Interior,  report  to,  of  bureau  employees Ill 

Secretary  of  State,  description,  impression,  and  certificate  of  seal  of  Comp- 
troller to  be  filed  with 107 

Secretary  of  the  Treasury: 

Agent,  special,  to  be  appointed  for  associationB  failing  to  redeem  circula- 
tion   508 

Appointment  of  clerical  force,  for  redemption  of  circulation,  by 415 

.Appointment  of  Comptroller  on  recommendation  of 101 

Appointment  and  classification  of  clerks  by 105 

Appointment  of  Deputy  Comptroller  by 103, 104 

Assignment  of  rooms,  etc.,  for  the  Comptroller  by 108 

Authorized  to  exchange  registered  for  coupon  bonds 305 

Authorized  to  issue  3  per  cent  gold  bonds  and  Treasury  gold  notes 318 

Certified  checks  may  be  received  for  duties,  internal  taxes,  and  all  public 

dues  upon  regulations  prescribed  by 770 

Circulating  notes  printed  under  direction  of 326 

Circulation,  worn  or  mutilated,  destruction  of,  by 339,  340 

Clerks  for  Comptroller  of  the  Currency  appointed  by 105 

Deposit  of  Government  moneys  upon  direction  of 615 

Depositaries  of  public  moneys  designated  bj' 243 

Duties  of  Comptroller  under  general  direction  of 100 

Earnings  from  Federal  reserve  banks,  disposition  of,  by 750 

Examiners,  appointments  to  be  approved  by 527 

Exchange  of  bonds,  terms  of,  prescribed  by 31 1,  323 

Gold  certificates,  authority  to  issue 433,  729 

Gold  certificates  to  be  issued  by 754 

Gold  dollar  to  be  maintained  as  standard  unit  of  value  by 749 

Gold  notes  may  be  issued  by,  in  exchange  for  certain  United  States  bonds. . .  318 
Gold  reserve  for  redemption  of  United  States  aud  Treasury  notes  to  be 

maintained  by 750 

May  prescribe  rules  for  printing  charter  numbers  on  circulation 325 

Kational  bank  examiners,  appointments  to  be  approved  by 527 

Notice  to  present  circulation  for  redemption  when  bonds  have  been  for- 
feited    510 

Organization  of  national  banks  with  capital  less  than  $100,000  to  be  approved 

by 224 

Panama  Canal  bonds,  additional  issue  by 767 

Plates  and  dies,  regulations  for,  examination  of,  to  be  approved  by 328 

Post-office  money-order  funds  placed  in  national  banks  designated  by...  732 


264  INDEX   TO    NATTONAL-BANK   ACT,  ETC. 

Secretary  of  the  Treasury — Continued.  Paragraph. 

Public-money  deposits 730 

Pulp  from  maceration  to  be  disposed  of  by 340 

Purchase  of  property  by  receiver  to  be  approved  by 524,  525 

Recommendation  of  appointment  of  Comptroller  by 101 

Receivers,  appointment  of,  by  Comptroller,  concurrence  in  by,  in  certain 

cases ; 402 

Refunding  United  States  bonds 759 

Regulations  for  redemption  records 513 

Regulations  for  reimbursement  of  circulation  retirement  account 416 

Seal  of  office  of  Comptroller  to  be  approved  by 107 

State- bank  circulation,  regulations  for  redemption  of,  to  be  prescribed  by.  706 

Sureties  on  bond  of  Comptroller  of  Currency  to  be  approved  by 102 

Sureties  on  bond  of  Deputy  Comptroller  to  be  approve  by 103, 104 

When  silver  dollars  are  coined.  Treasury  notes  to  be  canceled,  and  silver 

certificates  to  be  issued  by 753 

Withdrawal  of  circulation  to  be  approved  by 314 

Sections  of  Revised  Statutes,  not  included  in  the  national-bank  act,  affecting 
national  banks 700-770 

Seciu-ity  for  circulation  (see  Bonds,  United  States),  United  States  bonds  as. .  302,  303 

Security  for  Government  deposits 243 

Security  for  loans: 

Personal 204 

United  States  notes  and  national  bank  notes  not  to  be  used  as 432 

Semiannual  return  of  circulation 440 

Senate : 

Comptroller  appointed  by  the  President,  by  and  with  the  advice  of 101 

Comptroller's  report  to  be  sent  to 112 

Shareholders: 

Agent  of,  to  return  to,  assets  of  insolvent  associations 522 

Annual  meeting 232 

.  Appointment  and  qualification  of  agent  of 522 

Assessment  for  impairment  of  capital 430 

Assets  of  insolvent  association  to  be  returned  to,  ratably  after  debts  are  paid .  517 

Consent  of,  necessary  to  extension 216 

Conversion  of  State  banks,  requirements 245 

Creditor's  bill  against 521 

Directors,  election  or  appointment  of ,  by 204,  232 

Dissenting  to  extension,  may  withdraw 219 

Duties  of  agent  of 522 

Enforcement  of  assessment  for  impairment  of  capital  stock 430 

Enforcing  payment  by,  of  installments 227 

Estates  and  funds  with  trustee  liable  for  assessment 242 

Extension  of  corporate  existence 215,  216 

Failure  to  pay  installments 227 

Impairment  of  capital,  assessment 430 

Increase  of  capital  stock  by 228,  229 

Individual  liability  of 240 

Liability,  enforcement  of,  by  receiver 515,  520 

Liability  of,  who  have  transferred  their  shares 241 

List  of,  to  be  kept  and  sent  to  Comptroller 439 

List  of,  subject  to  inspection 439 

Location,  change  of,  by 211 

Names,  residences,  and  number  of  shares  held  by  each  in  organization 

certificate 202 

Personal  liability  of,  in  certain  converted  State  banks 240 

Provision  for  election  by,  when 238 

Proxies,  voting  by 231 

Qualifications  of  directors 233 

Reduction  of  capital  stock  by 230 

Rights,  and  liabilities  of,  on  transfer  of  shares 225 

Title  and  location  of  association,  change  of,  by 211 

Vote  of,  necesary  to  place  association  in  liquidation * 500 

Voters,  qualification  of 231 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  265 

Shares:  Paragraph. 

Association  not  to  own  or  hold  its  own ,  except 426 

Capital  stock  number,  and  name  of  holders  to  be  stated  in  organization 

certificate 202 

Consent  of  owners  of  two-thirds,  necessary  to  extension 216 

Converted  State  bank  to  be  the  same  as  prior  to  conversion 245 

Disposition  of,  taken  for  debt 426 

Fifty  per  cent  of  aggregate  value  of,  to  be  paid  in  prior  to  beginning  busi- 
ness    226 

Holding  of,  in  other  banks  by  converted  banks  authorized 245 

Installments,  payment,  and  certification  of 226 

List  of  owners  of,  to  be  kept  and  copy  s<^;nt  to  Comptroller 439 

Loan  on  security  of,  prohibited 426 

Oath  of  director  relative  to 236 

Owners  of  two-thirds  may  place  association  in  liquidation 500 

Organization  certificate  to  state  capital  and  number  of 202 

Personal  property 225,  451 

Preference  in  allotment  of,  in  succeeding  associations J19 

Purchased  or  acquired 426 

Qualifications  of  directors 233 

Receiver  may  be  appointed  for  failure  to  dispose  of,  taken 426,  515 

Sale  or  forfeiture  of,  for  failure  to  pay  installments  due 227 

Sale  of,  when  necessary 219,  426,  430 

State  taxation  of 451 

Transfer  of : 225 

Value  of,  of  shareholders  dissenting  to  extension,  how  ascertained 219 

Value,  par,  of  each 225,  245 

Voting.... 231 

Signature  on  circulation : 

Not  required  for  redemption  of 417 

President  or  vice  president  and  cashier 324 

Treasurer  and  Register,  United  States 324 

Silver: 

Construed  to  be  lawful  money,  when 342 

Reserve  of  gold  banks  to  gold  and 342 

Silver  certificates: 

Clearing-house  balances  payable  in 729 

Denominations  of 755 

Issue  of,  in  place  of  Treasury  notes,  when 753 

Issue  of,  when 753,  755 

Reserve  of  national  banks  may  be 729 

Silver  coinage: 

Dollars 751,  753 

Subsidiary 756,  757 

Silver  coins: 

Foreign,  not  legal  tender 719 

Philippine  Islands,  legal  tender 719 

United  States,  are  legal  tender 722,  723 

Silver  dollars  to  remain  legal  tender 722,  751 

Solicitor  of  the  Treasury,  conduct  of  suits  under  direction  and  supervision  of . . .  700 

Special  acts  relating  to  national  banks 803 

Special  agent.     {See  Agent.) 

Special  customs  deposits,  certified  checks  receivable  for,  under  certain  condi- 
tions    770 

Special  examination  for  extension  of  charter 217 

Special  reports,  authority  for - 440 

Specie  payments,  no  notes  under  |5  to  be  issued  after  resumption  of 329 

Standard  unit  of  value,  gold  dollar  declared  to  be 749 

State  banks: 

Branches  of,  converted 246 

Circulation  of,  when  exempt  from  taxation 706 

Conversion  of 245 

Examination  (member  banks) 527 

Penalty  for  failure  to  make  return  of  tax  on  circulation 712 

Penalty  for  unauthorized  receipt  of  public  money 738 

Reports  of,  provided  for HO 


266  INDEX    TO    NATIONAL-BANK   ACT,   ETC 


State  banks — Continued.  Paragraph. 

Return  of  taxable  circulation 711 

Sharebolders'  personal  liability,  exceptions 240 

Shares  of,  converted '. 245 

Statement  of  condition 110 

Tax  on  circulation 705 

Tax  on  circulation  of  converted 713 

Tax  on  unauthorized  circulation 708-710 

State  courts.     {See  Comptroller;  Suits.) 

State,  Territory,  or  District: 

Change  of  title  or  location  of  associations 211 

Conversion  of  bank  organized  under  authority  of  laws  of 245 

Interest,  national  banks  not  to  take,  etc.,  in  excess  of  legal  rate  in 422 

"National,  "  use  of  the  word  in  titles 530 

Qualification  of  directors 233 

Proceedings  to  enjoin  Comptroller  or  receiver  to  be  brought  in  district  in 

which  association  is  located 702 

Taxation  of  circulation  of  State,  etc. ,  associations 705,  7l5 

Taxation  of  money  by 716, 717 

Taxation  of  national  banks  by 451 

Stationery,  etc 108 

Status  not  changed  by  extension  of  charter 218 

Status  of  associations  organized  under  the  act  of  1863 247 

Statutory  bad  debts  defined 429 

Stock: 

Amount  of  capital,  to  be  stated  in  organization  certificate 202 

Increase  of  capital 228 

Of  national  banks  may  be  held  by  converted  State  banks 245 

Par  value  of 225 

Payment  and  certification  of 226 

Purchased  or  acquired 430 

Keduction  of  capital „ . .  230 

Transfer  of  shares 225 

Stocks,  United  States,  exempt  from  taxation 716 

Stolen  national-bank  notes,  redemption  of 417 

Subsidiary  silver  coinage 756, 757 

Succession: 

Expired  associations 219 

Period  of,  national  banks 204 

Suits: 

Against  United  States  officers  or  agents 700 

Certified  copy  of  organization  certificate  evidence  in 704 

Circuit  and  district  courts,  jurisdiction  of 214,  218,  701 

Corporate  powers  of  associations 204 

Creditors'  bill  against  shareholders 521 

Crimes,  jurisdiction,  etc.     {See  Crimes.) 

District  coiu*ts,  jurisdiction  of;  to  enjoin  Comptroller 701 

Enjoining  Comptroller  or  receiver 518 

Forfeiture  of  charter 526 

Proceedings  to  enjoin  Comptroller  to  be  brought,  where 702 

Sealed  certificate  of  Comptroller  competent  evidence 703 

Shareholders'  ajgent 522 

Shareholders'  liability,  to  enforce 515 

Solicitor  of  the  Treasury  to  direct  and  supervise  certain 700 

Surplus: 

Converted  State  banks  with  capital  of  $5,000,000 240 

Creation  of 424 

Loans,  limit  of,  measured  by  capital  and 425 

Surplus  and  dividends,  provisions  for  surplus  and  payment  of  dividends 424 

Surrender  of  bonds.     {See  Bonds,  United  States.) 

Suspension  of  business  after  refusal  to  pay  circulation 509 


INDEX   TO    NATIONAL-BANK   ACT,   ETC.  267 


T. 

Paragraph. 

Taking  unauthorized  impressions  of  tools,  p)enalty  for 744 

Tax: 

Circulation— 

Enforcing  payment  of 448 

Exempt  from 706 

Failure  to  make  returns 447 

Of  converted  State  lianks 713 

Tlate  and  time  of  payment 444 

"Refunding  excess 449 

Secured  by  Panama  Canal  bonds 303 

Semiannual  return  of 446 

Money  of  all  kinds  subject  to,  by  States,  etc 717 

Notes",  State  banks,  corporation,  company,  or  persons 70.5-708,  710 

Notes,   State  banks,  corporation,  company,  or  persons,  failure  to  make 

returns 712 

Notes,  State  banks,  corporation,  company,  or  persons,  semiannual  return. .  711 

Provisions  restricted  on  circulation 714 

Hemission  of,  on  insolvent  national  banks 450,  715 

State  taxation  of  national  banks 451 

Taxation.     {See  Tax.) 
Taxes: 

Internal-revenue,  on  imports  may  be  paid  by  certified  checks 769 

Teller.     {See  Officers.) 
Term: 

Of  office  for  directors 232 

For  which  charter  is  issued 204 

For  which  real  estate  may  be  held 224 

Territorial  court.     {See  Comptroller;  Redemption ;  State,  etc.) 

The  national-bank  act,  authoritv  for  title 200 

Time: 

Allowed  for  transmission  of  reports  of  condition 440 

Deposits  defined 403 

For  paj-ment  of  assessment  for  impairment  of  capital 430 

For  pa\Tnent  of  tax  on  circulation 444 

In  which  liquidating  banks  must  deposit  lawful  money 502.  504 

In  which  United  States  bonds  may  be  refunded 315 

Title  and  location,  change  of,  by  national  banks 211,  213,  803 

Title  of  association  to  be  approved  by  Comptroller  of  Currency 202 

Transfer  of  bonds 306 

Association  to  be  notified 308 

Record  of 307 

Transfer  of  shares  of  capital  stock,  effect  of 241 

Transfer  of  shares  of  stock 225 

Transfers  {see  Treasurer,  United  States;  Bonds,  United  States),  when  void 529 

Transportation  charges  for  redeemed  circulation 414 

Treasurer,  United  States: 

Application  to  sell  bonds  to  be  filed  with 315 

Circulation  of  liquidating  and  insolvent  banks,  duty  of 5U5.  606 

Circulation,  tax  on,  to  be  paid  to 444 

Circulation,  withdrawal  of,  provisions  for 314 

Deposits  of  bonds  with 302 

Deposit  of  bonds  with,  to  secure  circulation 323 

Deposit  of  lawful  money  with,  by  liquidating  bank i>02 

Disposition  of  redemption  account 416 

Enforcing  tax  on  circulation 448 

Examination  of  bonds  and  records,  provisions  for 309,  310,  311 

Federal  Reserve  Board  to  be  furnished  with  list  of  application.^  to  .sell  bonds.  316 

Fine  for  failure  to  make  reports  to  Comptroller  to  be  retained  by 443 

Interest  on  bonds  to  be  retained  by,  when 430.  448 


268  INDEX   TO    NATTONAL-BANK   ACT,  ETC. 

Treasurer,  United  States — Continued.  Paragraph. 

Lawful  money  to  redeem  circulation  of  extended  banks  to  be  deposited 

with 220 

Proceedings  on  default  in  making  return  on  circulation  subject  to  duty. . .  448 
Public  moneys  to  be  deposited  with  Assistant  Treasurer,  Government  de- 
positaries, or 730,  731 

Piu"chase  of  property  by  receiver,  approval  to  be  filed  with 524 

Receiver  to  pay  all  money  received  to 515 

Redemption — 

Fund  to  be  kept  with 414 

Of  circulation  by 414 

Of  circulation  in  United  States  notes  by 414 

Semiannual  return  to,  of  circulation  subject  to  duty 446 

Signature  of,  on  circulation 324 

Tax,  excess,  refunding 449 

Tax  on  circulation,  to  be  paid  to 444 

Transfer  of  bonds  in  trust  for  associations  to  be  made  to 306 

Treasury,  extended  banks  to  reimburse,  cost  of  new  plates 220 

Treasury  notes: 

Cancellation  of „ . .  753,  756 

Demand,  legal  tender 726 

Interest-bearing 727 

Issue  of 318,  764 

Redeemable  in  gold 750 

Tax,  exempt  from 716 

Treasury,  United  States  (see  also  Treasurer,  United  States): 

Association  to  reimburse,  for  cost  of  redemption  of  circulation  and  plates..  414 

Currency  Biu-eau  in 100 

Divisions  of  Issue  and  Redemption  established 752 

Notice  to  present  circulation  at 510 

Penalty  for  failure  of  associations  to  report,  to  be  paid  into 443,  446 

Redemption  account,  disposition  of 416 

Redemption  fund,  5  per  cent,  in 414 

Redemption  of  circulation  at 312,  414,  505,  513,  514 

Trial  for  violation  of  interlocking  directorate  act 235 

Trust  companies: 

Examinations  (member) 527 

Trust,  purchase  of  property  by  receiver  to  protect - 523 

Trustees: 

Not  personally  liable 242 

Power  of  national  banks  to  act  as 208 


INDEi   TO    NATIONAL-BANK   ACT,   ETC.  209 


tr. 

Paragraph. 

Unauthorized  deposit  of  public  money,  by  disbursing  ofRr^'xr , . .  737 

Unauthorized  receipt  or  use  of  public  money  by  banks,  etc 738 

Uncurrent  notes,  issue  of,  prohibited 431 

Uncurrent  subsidiary  silver,  recoinage  of 757 

Undivided  profits  not  considered  borrowed  money 429 

Unearned  dividends  prohibited 429 

Unfit  circulation,  redemption  of 414 

United  States  (see  also  Officers  of  the  United  States;  Crimes,  jurisdiction,  etc.): 
Bonds.     (See  Bonds.) 

Coins  are  legal  tender 720-724 

Courts  of,  may  enjoin  proceedings 518 

Courts,  jurisdiction  of,  not  affected 214 

Debt,  deposits  to  redeem  circulation  to  be  reported  monthly  as 416 

Deposits  in  Federal  reserve  banks 615 

Deposits.     (See  Government  depositaries.) 

Gain  by  failure  to  redeem  notes  by  extended  banks 220 

Obligations,  exempt  from  taxation 716 

Obligation  of,  defined 739 

Securities,  penalty  for  counterfeiting  or  forging 740 

Suits  in  which,  is  a  party 700 

United  States  disbursing  officers: 

Fraudulent  notes  to  be  marked  by 748 

Penalty  for  unauthorized  deposit  of  public  money 737,  738 

Withdrawal  of  public  money 730 

United  States  notes: 

Are  legal  tender 725 

Circulation  of  banks  redeemable  in 414 

Fraudulent,  to  be  marked 748 

Issue  of 764 

Obligations  of  United  States  defined 739 

Penalty  for: 

Dealing  in  counterfeit 746 

Illegal  use  or  possession  of  material  for  printing 745 

Passing  counterfeit 743 

Pledging,  etc. 432 

Taking  or  having  unauthorized  impressions  of  tools,  etc 744.  745 

Redeemable  in  gold •  750 

Subject  to  taxation  by  States,  etc 717 

Unit  of  value,  gold  dollar  to  be  standard 749 

Unpaid  dividends  not  considered  borrowed  money 427 

Unsigned  national  bank  curreecy,  redemption  of 417 

Using  plates  to  print  notes  without  authority 742 

Use  of  circulation,  restricted 428 

Use  of  title  "  National "  prohibited 530 

Usury: 

Interest,  when  not 422 

Penalty  for 423 


270  INDEX   TO    NATIONAL-BANK   ACf,   ETC. 


V. 

Paragraph. 

Vacancies,  board  of  directors,  filling Z37 

Value  of  capital  stock  of  converted  State  banks,  par 245 

Value  of  capital  stock,  par 225 

Vaults  for  Currency  Bureau 108 

Verification  of  report  of  condition 441 

Vice  president  {see  also  Officers): 

Bonds,  United  States,  may  sign  transfer  of 306 

Circulation,  may  sign 324,  337 

Election  or  appointment  of 204 

Proxy,  not  to  act  as 231 

Violations  of  provisions  of  national-bank  act,  forfeitiu-e  of  charter  for 526 

Visitatorial  powers  restricted 528 

Visitatorial  powers,  limitation  of 528 

Void,  illegal  preference 529 

Voluntary  liquidation.     {See  Liquidation.) 
Vote  required: 

For  change  of  title  or  location 211 

For  conversion  of  State  bank 245 

For  increase 229 

For  liquidation 204,  500 

For  reduction 230 

For  shareholders'  agent 522 

For  voluntary'  liquidation 500 

To  fix  date  of  election 238 

Voters,  qualifications  of  shareholders  at  elections 231 


INDEX    TO    NATIONAL-BANK   ACT,   ETC.  271 


Paragraph. 

When  receiver  may  be  appointed 520 

Where  proceedings  to  enjoin  Comptroller  must  be  brought 702 

Withdrawal : 

Bonds,  general  provisions  respecting 311,  414 

Circulation,  provisions  for 312,  313,  314,  414 

Deposit  and,  of  public  moneys 730,  737 

Dissenting  shareholders 219 

Expired  associations,  bonds  of 221 

Illegal  preference  of  creditors 529 

Liquidating  associations,  bonds  of 504 

Of  reserve  from  Federal  reserve  bank 409 

Reduction  of  capital 230 

Unearned  dividends 429 

Woni-out  circulation,  destroying  and  replacing 339 


INDEX  TO  THE  FEDERAL  RESERVE  ACT. 


A. 

Acceptance:  Paragraph. 

Failure  of  national  banks  to  signify 602e,  602f 

Of  terms  of  act 602b 

Acceptances,  bankers' 613b,  614 

Acceptances  rediscounted  by  Federal  reserve  banks 613b,  613c 

Accommodation  extended  to  member  banks 604c 

Accounts: 

Foreign 614 

With  other  Federal  reserve  banks  for  exchange  purposes 614 

Acknowledgment  of  organization  certificate  of  Federal  reserve  banks 604a 

Act  of  March  14,  1900,  parity  provisions  reaflirmed 626 

Act  of  May  30,  1908,  certain  provisions  extended,  etc 627 

Additional  national-bank  circulation 627 

Tax  rate  changed 627a 

Additional  reserve  and  central  reserve  cities 611e 

Administrators,  national  banks  as 611k 

Advancements  extended  to  member  banks 604c 

Ad^dsory  council 612,  612a 

Agencies,  foreign 614 

Agent,  when  bank  may  act  as  insurance  agent  or  as  broker  in  procuring  loans 

on  real  estate 613c 

Agent,  Federal  reserve 604f 

Alaska 602,619g 

Reserve  requirements  for  national  banks  in 619g 

Aldrich- Vreeland  Act,  effect  on 627 

Amending  section  5154,  United  States  Revised  Statutes 608 

Amendment  to  section  5202,  United    States   Revised    Statutes,  liability  of 

national  banks 613c 

Amount  of  capital  required  for  Federal  reserve  banks 6021 

Amount  of  capital  stock  required  to  be  subscribed  to 602c 

Amount: 

Of  Federal  reserve  bank  circulating  notes  not  limited 618b 

Of  Federal  reserve  notes  that  may  be  issued 616a 

Of  gold  notes  that  may  be  issued  to  Federal  reserve  banks 618c 

Of  redemption  fund  required  for  Federal  reserve  notes 616d 

Of  reserve  required  for  Federal  reserve  notes 616b 

Of  reserve  required  to  be  held  by — 

Banks  elsewhere  than  in  reserve  cities 619a 

Central  reserve  city  banks 619c 

Country  banks 619a 

Reserve  citv  banks -  -  619b 

Of  United  States  bonds  that  may  be  purchased  by  Federal  reserve  banks 

from  member  banks 618a 

That  may  be  loaned  on  farm  lands 624 

Annual  report  of  Federal  Reserve  Board  to  House  of  Representatives 610g 

Application  for  Federal  reserve  notes 616a 

Application  for  Federal  reserve  notes  subject  to  action  of  Federal   Reserve 

Board ■•■- 616e 

Application  for  membership  after  organization  of  Federal  reserve  banks b05 

Appointment  of: 

Employees  of  Federal  Reserve  Board 6lll 

Examiners ^-"^ 

Members  of  Federal  Reserve  Board 610 

.164312°— 20 18  273 


274  INDEX  TO  FEDERAL  RESERVE  ACT. 

Appropriation:  Paragraph, 

For  expenses  of  organization  committee 602n 

For  expenses  of  printing  Federal  reserve  notes 616i 

Assessments  for  examiners 621a 

Assessment  on  Federal  reserve  banks: 

To  pay  cost  of  Federal  reserve  notes 616h 

To  pay  salaries  and  expenses  of  board 610b,  611 1 

Assistants  to  organization  committee 602n 

Attorneys  not  to  receive  fee  or  other  consideration  other  than  usual  fee  or  salary.  622b 
Authority  of  Reserve  Bank  Organization  Committee 602a 


INDEX    TO   FEDERAL    RESERVE    ACT.  275 


B. 

Bank:  Pararraph. 

Balances,  net,  to  or  from  to  be  used  in  reserve  calculations 619f 

Defined 601 

Examinations 621 -C22,  625n 

Bank  examiners: 

Appointment  of G21 

Gratuities  to,  prohibited 622a 

Loans  to,  prohibited 622a 

Powers  of 621 

Salaries  of 621i 

Secrecy  enjoined  of 622a 

Service  to  banks  and  their  directors,  officers,  etc.,  restricted  to  official 
duties 622 

Bankers'  acceptances 613b-  614 

Banks: 

Eligible G02b,  608,  609  609d 

May  become  national,  how 608 

Not  in  reserve  cities.     {See  Coimtry  banks.) 

Outside  continental  United  States 619g 

Bed  pieces  for  Federal  reserve  notes 616h 

Bills  of  exchange: 

Acceptable  by  member  banks 613b 

Bought  by  Federal  reserve  banks  from  member  banks 614 

Foreign 614 

Limit  to  liability  of  national  banks  not  to  include 613c 

Open-market  operations 614 

Rediscounted  by  Federal  reserve  banks 613a-613c 

Bills  of  State  and  subdivisions  thereof  dealt  in  by  Federal  reserve  banks 614 

Bills  receivable,  subject  to  rediscount 613a-613c 

Board,  held  to  mean  Federal  Reserve  Board 601 

Board  of  directors  of  Federal  reserve  bank  {see  also  Federal  reserve  bank, 

directors  of) 604c-604i 

Certificate  to  be  made  by,  when  capital  is  increased  or  reduced 605d,  606 

Bond,  Federal  reserve  agent 611i 

Bonds,  United  States: 

Dealt  in  by  Federal  reserve  banks 614 

Hypothecation  of,  by  Federal  reserve  banks 614 

National  banks  not  required  to  deposit  prior  to  commencement  of  business. .  617 

Purchase  of,  by  Federal  reserve  banks 618a 

Refunding 618-618c 

To  secure  Federal  reserve  bank  notes 604b 

"Two's"  exchange  for  1-year  gold  notes  and  30-year  gold  bonds 618c 

Thirty-year  3  per  cent  gold,  without  circulating  privileges 618c 

In  exchange  for  1-year  3  per  cent  Treasury  notes 618d 

Branch: 

Federal  reserve  banks 603 

National  banks — 

Foreign 625 

In  dependencies 625 

By-laws  of  Federal  reserve  banks 604b 


276  INDKX  TO  FEDERAL  BESERVE  ACT. 


c. 

Paragraph. 

Cable  transfers,  purchase  and  sale  of,  in  open  market 614 

Cancellation  of  Federal  reserve  notes 616c 

Capital,  amount  required  to  enable  State  bank  to  become  member  bank 609f 

Capital  stock  of  Federal  reserve  banks: 

Allotment  of 602c,  604a 

Cancellation  and  redemption  of 605e,  606 

Dividends 607 

Hypothecation  of,  prohibited  when  owned  by  member  bank 605a 

Increase  and  decrease  of 605-606 

Liability  of  holders ^ 602d.  606 

Maximum  amount  permitted  to  be  held  by  any  one  individual  or  corpo- 
ration   602h 

Minimum  amount  of,  before  organization 602 1 

Net  earning,  apportionment  of 607 

Payment  for 602c,  602g,  609 

Shares  of  $100  each 605 

Subscriptions  to^ 

After  organization  of  Federal  reserve  banks 605b 

By  banks 602c,  604,  619g 

By  public 602g,  602h 

By  State  banks 604,  609,  609a 

By  trust  companies 604,  609,  609a 

By  trust  companies  in  District  of  Columbia 604,  602b,  602c 

By  United  States 602i 

Transfer  of 602h,  602k,  605a 

Voting  power  of,  limited 602j 

Cash  reserve  required: 

Banks  elsewhere  than  in  reserve  cities 619a 

Central  reserve  city  banks 619c 

Reserve  city  banks 619b 

Central  reserve  cities 602  m 

Cash  reserve  required 619c 

Number  may  be  increased  or  decreased. 611e 

Reserve  board  to  control 611e 

.  Status  of 602  m 

Certificate  of: 

Increase  of  capital  of  Federal  reserve  banks 605d 

Organization  of  Federal  reserve  banks 604a 

Reduction  of  capital  of  Federal  reserve  banks 606 

Certificates  of  deposit  as  time  deposits 619 

Chairman  of  board  of  directors  of  Federal  reserve  banks 604d,  604f 

Changing  collateral  for  Federal  reserve  notes 616g 

Charter  forfeited  by  national  banks  not  accepting  terms  of  this  act 602f 

Charter  of  Federal  reserve  banks  to  be  for  20  years 604b 

Checks  receivable  at  par  by  Federal  reserve  banks,  when 616j 

Circulating  notes  of: 

Federal  reserve  banks,  issue  of 618b 

Member  banks,  retirement  of 618,  618a 

Circulation  {see  Federal  reserve  bank  notes  and  Federal  reserve  notes): 

Federal  reserve  notes 616,  616a 

Limit  to  liability  of  national  banks  not  to  include 613c 

Civil  service,  President  may  place  employees  of  Federal  Reserve  Board  under. .   6111 

Class  A  directors 604d,  604e 

Class  B  directors 604d,  604e 

Class  C  directors 604d,  604i 

Clearing  house  for  Federal  reserve  banks  and  member  banks 6161 

Collateral  for  Federal  reserve  notes 616a 

Substitution  of 616g 


INDEX  TO  FEDERAL  RESERVE  ACT.  277 

Paragraph. 

Collection  charges 616k 

Collateral,  limit  to  liability  of  national  banks  not  to  include 613c 

Commercial  paper: 

Eligible  for  rediscount 6I3a 

Foreign 614 

Purchase  and  sale  of 614 

Security  for  Federal  reserve  notes 616a 

Comptroller  of  the  Currency: 

Duties  performed  under  direction  of  the  Secretary  of  the  Treasury 610h 

Duties  when  Federal  reserve  districts  have  been  established 604 

Examination  of  member  banks 621 

Examiners'  salaries,  recommended  by 621a 

Examiners'  reports  to 621 

Expense  of  examination,  assessed  by 621a 

Federal  reserve  notes,  issued  by 61  Id 

Federal  reserve  notes,  unfit  for  circulation,  to  be  returned  to 616c 

May  permit  examiners  to  disclose  information  in  regard  to  member  banks. .   622b 

Member  of  Federal  Reserve  Board 610 

Member  of  Reserve  Bank  Organization  Committee 602 

National-bank  examiners  appointed  by 62 1 

Organization  certificate  of  Federal  reserve  banks  to  be  filed  with 604a 

Plates,  dies,  etc.,  for  Federal  reserve  notes  under  8uper\"ision  and  control  of.  616h 

Powers  of 610h 

Salary  of 610 

Suits  against  national  banks  not  complying  with  terms  of  this  act 602f 

Congressman  not  allowed  to  be  member  of  Federal  Reserve  Board  or  officer  or 

director 604d 

Congress,  visitatorial  powers  of 621b 

Contracts,  powers  of  Federal  reserve  banks  to  make 604b 

Conversion  of  State  banks 608 

Corporate  seal.  Federal  reserve  banks 604b 

Correspondents,  foreign 614 

Council,  Federal  ad\isory 612,  612a 

Country  banks: 

Cash  reserve  required 619a 

Distribution  of  reserve 619a 

Reserve  requirements  for 619a 

Reserve  required  to  be  held  with  Federal  reserve  bank 619a 

Reserve  that  may  be  held  with  bank  in  reserve  or  central  reserve  city 619a 

County  bonds,  etc.,  dealt  in  by  Federal  reserve  banks 614 

Currency  act  of  Mar.  14,  1900,  parity  provisions  reaffirmed 626 

Currency  associations 627 

Ciistoms,  Federal  reserve  notes  receivable  for 616 


278  INDEX  TO  FEDERAL  RESEBVE  ACT, 


D. 

Paragraph. 

Daily  report  by  Federal  reserve  agent  of  Federal  reserve  notes 616a 

Definitions 601 

Demand  and  time  deposits 619 

Demand  deposits  defined -». 619 

Dependencies: 

Branches  of  national  banks  in 625 

National  banks  in 619g 

Depositories 615 

Deposits: 

In  Federal  reserve  banks 613,  614,  615 

Reserves  against 616b 

In  member  banks,  reserves  against 619,  619f 

Limit  to  liability  of  national  banks  not  to  include 613c 

Of  Government  funds - .  613,  615 

Secretary  of  Treasury  to  receive  deposits  of  gold  coin  or  gold  certificates 

tendered  by  Federal  reserve  bank  or  agent 616m 

Various  kinds  defined 619 

With  Federal  reserve  agent  of  Federal  reserve  notes,  gold,  etc.,  by  Federal 

reserve  banks 616f ,  616g 

"With  nonmember  banks,  limited 619a 

Denomination  of  gold  notes  issuable  to  Federal  reserve  banks 618c 

Deputy  Federal  reserve  agent 604f 

Description  of  Federal  reserve  notes G16c,  616h 

Destruction  of  Federal  reserve  notes 616c 

Dies,  etc. ,  for  Federal  reserve  notes 616h 

Directors  (see  Federal  reserve  banks,  directors  of): 

Branch  Federal  reserve  banks 603 

Liability  for  violation  of  this  act  by  national  banks 602f 

Not  to  receive  fee  or  other  considerations  for  loan 622c 

Of  Federal  reserve  banks,  suspension  or  removal  of 611f 

Discount  rates: 

Established : .614 

Increased  by  tax  on  deficiency  in  reserve  requirements 611c 

Recommendations  by  council 612a 

Discounts: 

By  Federal  reserve  banks 613a 

Extended  to  member  banks 604c 

Dissolution  of: 

Federal  reserve  bank C04b,  607 

National  member  banks 602f 

Distribution  of  reserve : 

Banks  elsewhere  than  in  reserve  city 619a 

Central  reserve  city,  banks  in 619c 

Reserve  city,  banks  in 619b 

District: 

Bonds,  etc.,  dealt  in  by  Federal  reserve  banks 614 

Certificates  showing  geographical  lines  of  Federal  reserve 604 

Held  to  mean  Federal  reserve  district 601 

District  of  Columbia,  trust  companies  in,  eligible 602b 

Dividends: 

Of  Federal  reserve  banks 607 

Prohibited  when  reserve  is  short 619e 

Unpaid,  limit  to  liability  of  national  banks  not  to  include 613c 

Doubtful  assets  of  Federal  reserve  banks,  ^vritten  off 611g 

Drafts: 

Limit  to  liability  to  national  banks,  not  to  include 613c 

Receivable  at  par  by  Federal  reserve  banks,  when 6l6j 

Rediscounted  by  Federal  reserve  banks 613a 

Drainage,  bonds,  etc.,  dealt  in  by  Federal  reserve  banks 614 

Duties: 

Of  Federal  advisory  council 612 

Of  Reserve  Bank  Organization  Committee 602 

Interest  rate  of  paid  directors 622e 

Securities,  purchase  of  and  sale  to  directors 622e 


INDEX  TO  FEDERAL  RESEEVE  ACT.  279 


E. 

Paragraph. 

Earnings,  division  of U07 

Election  of  directors  of  Class  A  and  Class  B 604e 

Eligible  banks 602b,  608,  60&-€09d 

Employees  not  to  receive  fee  or  other  consideration  other  than  usual  salary 6J2c 

Employees  not  to  receive  a  greater  rate  of  interest  than  other  depositors 622e 

Employees  of  Federal  reserve  banks 604b 

Employees  of  Federal  Reserve  Board 6111 

Estimate  of  reserve  requirements 619f 

Examiners: 

Appointment  of 621 

Examiner,  member  bank  not  to  make  loan  or  grant  any  gratuity  to 622a 

Examiner  not  to  perform  any  service  for  compensation  for  any  bank  or 

oflBcer 622b 

Examiner  not  to  disclose  names  of  borrowers  or  collateral  without  first  ob- 
taining written  consent  of  Comptroller 622b 

Powers  of 621 

QuaUfications  of 621 

Reports  of 621 

Salaries  of 621a 

Examinations: 

Assessments  for 621a 

Bank 621-622,  625 

Examiners  to  make 621 

Expense  of 621a 

Federal  reserve  banks 621c 

Member  banks 621, 621b 

National  banks 621 

Number  to  he  made 621 

Of  foreign  branches  of  national  banks 625 

Of  plates,  dies,  bed  pieces,  etc..  of  Federal  reserve  notes 616h 

Qualifications  of  examiners 621 

State  bank  and  trust  companies 621 

Exceptions  to  limit  to  liability  of  national  banks 613c 

Exchange,  account  with  other  Federal  reserve  banks  for  purposes  of 614 

Exchange  charges 616k,  6161 

Exchange  of  certain  United  States  bonds  for  gold  notes 618d 

Executive  officers  of  Federal  Reserve  Board 610 

Executors,  national  banks  as 611k 

Exempt  from  taxes  except  real  estate 607a 

Exempt  from  taxes,  gold  notes  issued  in  exchange  for  gold  bonds 618c 

Expenses: 

For  Federal  reserve  notes 616h,  616i 

Of  examiners 621a 

Of  Federal  advisory  council 612 

Of  Federal  Reserve  Board 610b 

Exports,  acceptances  on,  eligible  as  discounts  by  Federal  reserve  and  member 

bfcnks '. 613h 

Extension  of  additional  currency  act  to  June  30,  1U15 t>27 


280  LNDEX   TO   FEDERAT,  RESERVE   ACT. 


F. 

Paragraph. 

Failure  to  accept  tenns  of  this  act 602e,  602f 

Failure  to  make  report,  penalty    609c-609d 

Farm  lands,  loans  on 624 

Federal  advisory  council 612,  612a 

Federal  reserve  agent 604f 

Bond  required  of 611i 

Daily  report  on  issue  and  withdrawal  of  Federal  reserve  notes 616a 

Deposits  with,  of  Federal  reserve  notes,  gold,  etc.,  by  Federal  reserve 

banks 616f,  616g 

Deputy 604f 

Federal  reserve  notes  issued  to  Federal  reserve  banks  through , 616 

Federal  reserve  notes,  applications  for,  made  to 616a 

Gold  coin  or  gold  certificates  to  be  received  as  deposits  by  Secretary  of 

Treasury  when  tendered  by  Federal  reserve  bank  or  agent 616m 

Information  concerning  member  banks  to  be  furnished  Federal  Reserve 

Board  by 621b 

Powers  of,  second  to  those  of  Secretary  of  Treasury 610f 

Salary  of 604f 

Special  examination  of  member  banks  to  be  approved  by 621b 

Federal  reserve  banks 602a 

Acceptances,  purchase  and  sale  of,  in  open  market 614 

Rediscount  of 613b,  613c 

Account  with  other  Federal  reserve  banks 613,  614,  6161 

Advances  to,  by  means  of  Federal  reserve  notes 616 

Amount  of  capital  stock  to  be  subscribed  to 602c 

Application  for  Federal  reserve  notes  subject  to  action  of  Federal  Reserve 

Board 616e 

Bankers'  acceptances,  purchase  and  sale  of,  in  open  market 614 

Bills  of  exchange — • 

Purchase  and  sale  of 614 

Purchase  from  member  banks 614 

Bills  of  State  and  political  subdivision  thereof  dealt  in ". 614 

Branches 603 

Foreign  connections 614 

By-laws 604b 

Cable  transfers,  purchase  and  sale  of 614 

Capital  stock  of 6021 

Certificate  of  organization 604 

Charter,  term  of 604b 

Checks  received  at  par,  when 616j 

Circulating  notes,  issue  of 618b 

Circulating  notes,  redemption  of 618b 

Clearing-house  provisions 6161 

Collateral  deposited  with  Federal  reserve  agent  for  Federal  reserve  notes. .  616a 

Increasing,  to  reduce  liability  for  notes 616f 

Substitution  of ." ,. 616g 

Withdrawal  of 616g 

Collection  charges 616k,  6161 

Commercial  paper — 

Purchase  and  sale  of 614 

Rediscount  of 613a-613c 

Security  for  Federal  reserve  notes 616a,  616f ,  616g 

Contracts,  power  to  make 604b 

Corporate  body 604b 

Powers  of. 604b 

Council,  recommendations  by 612a 

Depository,  Government 613, 615 


INDEX  TO  PEDEBAL  RESERVE  ACT.  281 

Federal  reserve  banks — Continued. 

Deposits —  Paragraph. 

Defined  and  classified 619 

From  member  banks 613,  616j 

From  or  in  other  Federal  reserve  banks 613,  614, 616j 

From  the  United  States 613, 615 

Reserves  against 616b 

With  Federal  reserve  agent  of  Federal  reserve  notes,  gold,  etc.  .  .  616f,  616g 

Directors 604f-604i 

Chairman  of  (Federal  reserve  agent) 604(1,  604f 

Bond  required  of 611i 

Chosen,  how 604d,  604e,  604f 

Classification  of 604d 

Compensation  of 604g 

Duties  of G04c 

Extension  of  discount,  advancement  and  accommodations  by 004c 

Number  and  classification  of 604d 

Qualifications  of 604d 

Removal  of 61  If 

Suspension  of 611f 

Term  of 604d ,  604i 

Vacancies (;04i 

Discount  rates  to  be  established fillc,  614 

Discount  by  Federal  reserve  bank  of  paper  secured  by  United  Slates  bonds 

issued  since  April  24, 1917 Glim 

Dissolution  of 604b.  607 

Dividends  of 607 

Doubtful  assets  of,  to  be  written  off 611g 

Drafts,  received  at  par,  when 616] 

Earnings,  divisions  of 607 

Employees 604b 

Establishment  of,  to  be  officially  announced  by  Secretary  of  Treasury 619 

Examination  of 621c 

Examination  of  member  banks  by 621b 

Exchange  charges 616k 

Exempt  from  taxes 607a 

Expense  of  Federal  Reserve  Board  to  be  paid  by 610b 

Federal  reserve  notes.     (See  Federal  reserve  notes.) 

Fiscal  agent  of  the  United  States 615 

Foreign  connections 614 

Franchise  tax 607 

Gold  bond,  30-year  3  per  cent  without  circulating  privilege 618c,  618d 

Under  same  general  terms  as  United  States  threes  without  circulating 

privilege  now  issued 618c 

Gold  coin  or  gold  certificates  to  be  received  as  deposits  by  Secretary  of 

Treasury  when  rendered  by  Federal  reserve  bank  or  agent 616m 

Gold  loans,  made  of,  and  contracted  for 614 

Gold,  purchase  and  sale  of 612a,  614 

Gold  notes,  1-year  3  per  cent  without  circulating  privilege GI8c,  618d 

Exempt  from  taxes 618c 

Government  deposits 613,  615 

Hypothecation  of  United  States  bonds  for  gold  loans 614 

Individual  liability  of  shareholders 602d 

Liquidation  of 607,  611h 

Loans  made  of,  and  contracted  for 614 

Municipal  securities  dealt  in 614 

National  banks  must  become  shareholders  of 602b.  602e,  602f 

Net  earnings  of,  apportionment  of 607 

Notes  of  (see  Federal  reserve  notes) 604b.  611d 

Notes  of  State  and  political  subdivisions  thereof  dealt  in 614 

OflBcers  and  employees 604b 

Ofl&cers  of,  may  be  removed  or  suspended 611f 

Open-market  operations 614 

Organization  of 602a,  604a,  604h 

Official  announcement  of,  by  Secretary  of  Treasury 619 

Powers  of ". .604b,  613-614 


282  INDEX  TO  FEDERAL  RESERVE  ACT. 

Federal  reserve  banks — Continued.  Paragraph. 

Purchase  of  United  States  bonds  from  member  banks 618a 

Redemption  fund 616c-616d,  616f 

Rediscount — 

Of  acceptances 613b 

Of  bills  receivable 613a 

Of  notes,  drafts,  and  bills  of  exchange 613a 

Of  paper  of  other  Federal  reserve  banks 611b 

Recommendations  by  council 612a 

Regulations  by  board 611b.  613c 

Refunding  United  States  bonds  held  by  member  banks 618-618b 

Reorganization  of 611h 

Reserve  required  to  be  held  with — 

By  banks  elsewhere  than  in  reserve  cities 619a 

By  central  reserve  cities 619c 

By  reserve  city  banks 619b 

Reserve  requirements  for  Federal  reserve  notes 616b,  616d 

May  be  suspended  by  board 611c 

Tax  on  deficiency  in 611c 

Reserve,  withdrawal  of,  by  member  banks 619o 

Reserves — 

Against  deposits 616b 

Against  Federal  reserve  notes 61 6b.  616d 

Of  member  banks 619-619g 

Revenue  bonds  of  State  and  political  subdivisions,  dealt  in 614 

Safeguarding  bonds,  notes,  collateral,  funds,  etc 6111 

Salaries  and  expenses  of  board  paid  by 610b,  611e 

Seal,  corporate 604b 

Senators,  Representatives,  prohibited  from  being  directors  of 604d 

Special  examinations  of  member  banks  may  be  ordered  by 621b 

State  banks  may  become  members 609-609d 

State  bills,  notes,  bonds,  and  warrants  dealt  in 614 

Statement  of  condition  to  be  published  weekly  by  board 611a 

Stockholders  of,  responsibility  and  liability  of 602d,  606 

Stock  of.     (See  Capital  stock.) 

Succession  of 604b 

Suits,  by  or  against 604b 

Supervision  of,  by  board 611a-611j 

Surplus  funds 607 

Suspension  of 611h 

Taxes,  free  from,  except  on  real  estate 607a 

Transfer  of  funds  among,  and  charges  therefor 616k 

United  States  bonds — 

Dealt  in 614 

Hypothecated  for  gold  loans 614 

United  States  bonds  of  member  banks  purchased  by 618a,  618b 

United  States  deposits 613,  615 

Warrants  of  State  and  political  subdivisions  thereof  dealt  in 614 

Worthless  assets  to  be  written  off 611g 

Federal  Reserve  Board: 

Admission  of  banks  other  than  national 609-609d 

Annual  report  of 610g 

Application  for  Federal  reserve  notes  may  be  granted  or  rejected  by 616© 

Approval  of,  required  for  issue  of  bonds  in  exchange  for  1-year  gold  notes. . .  618c 
Authorized  to  review  decisions  of  Reserve  Bank  Organization  Committee.  602 

Chairman  of 610c 

Class  C  directors  designated  by 604d,  604f 

Clearing  house — 

For  reserve  banks,  designation  by 6161 

For  member  banks,  designation  by 6161 

Creation  of 610 

Directors  of  Federal  reserve  banks  may  be  suspended  or  removed  by 611f 

Discounts  by  Federal  reserve  banks,  character  to  be  determined  by 613a 

Discount  rates  subject  to  approval  of 614 

Doubtful  or  worthless  assets  of  Federal  reserve  banks  to  be  ordered  written 
off  books  of  Federal  reserve  banks 611g 


INDEX  TO  FEDERAL  RESERVE  ACT.  283 

Federal  Reserve  Board — Continued.  Paragraph. 

Employees  of,  not  in  classified  service (il  11 

Examinations  of  Federal  reserve  banks  and  member  banks 611a 

Examinations  ordered  by 621-621c 

Examiners'  salary  fixed  by G21a 

Expenses  of,  how  paid 610b,  61  le 

Extension  of  discounts  etc.,  by  directors,  sul)ject  to  orders  of 60-lc 

Federal  advisory  council,  expenses  to  be  approved  by 612 

Federal  reserve  banks  may  be  required  to  purchase  United  States  bonds 

by 618a,  G18b 

Federal  reserve  notes  issued  under  the  supervision  of 610h 

Federal  reserve  notes  issued  and  retirement  regulated  by Gild 

Foreign  branches  of  national  banks 625 

Foreign  business  to  be  approved  by 614 

Governor  of 610a 

Information  concerning  Federal  reserve  banks  to  be  furnished  to,  by  Fed- 
eral reserve  agent 621b 

Issue  of  Federal  reserve  notes  regulated  by 616,  616a 

Interest  on  rediscounts  to  be  fi.xed  by 611b 

Making  farm  loans 624 

Meetings  of 610c 

Members  of 610 

Conditions  precedent  on 610,  610d 

Oath  of  office 610,  610d 

Qualifications  of 6 10a 

Removal  of,  by  President 610 

Restriction  on,  during  and  after  term  of  office 610,  610d 

Salaries  of 610 

Term  of 610 

National  banks  to  act  as  trustee,  etc.,  by  permission  of 611k 

Offices 610a 

Open-market  operation  operated  by 614 

Permission  for  member  banks  to  secure  discounts  for  nonmember  banks 

may  be  granted  by 619d 

Powers  of 611-611e 

Powers  secondary  to  those  of  Secretary  of  Treasurj^  when 610f 

Power  to  add  to  list  of  cities  prohibited  from  making  farm  loans 624 

Purchase  of  United  States  bonds  by  Federal  reserve  banks  on  order  of 618a 

Redemption  fund  for  Federal  reserve  notes  to  be  required  by 616d 

Rediflcounting  of  paper  of  Federal  reserve  banks  by  other  Federal  reserve 

banks 611b 

Report  of,  to  House  of  Representatives 610g 

Safeguarding  assets  of  Federal  reserve  banks  by 6 1  li 

Special  examination  of  member  banks  to  be  approved  by 62  lb 

Substitution  of  collateral  for  Federal  reserve  notes  to  be  regulated  by 61 6g 

Suits  against  national  banks  not  complying  with  terms  of  this  act 602f 

Suspension  of  reserve  requirements  by 6 1  Ic 

Transfer  of  public  stock  in  Federal  reserve  banks  to  be  regulated  by 602k 

Vacancies 610e 

Vice  governor 6 10a 

Violations  of  act,  of  Federal  reserve  banks,  duty  of 6 1 1  h 

Federal  reserve  cities 602,  604 

Federal  reserve  banks  therein G02a 

Federal  reserve  districts 602,  G04 

Designation  by  number 602 

Farm  land  loans  confined  to 624 

How  apportioned 602 

Increase  in  number  of 602 

Readjustment  of 602 

Federal  reserve  notes  (obligations  of  United  States): 

Acceptable  for 616 

Application  for 611b,  616a,  616e 

Authorization  of 616 

Cancellation  and  destruction  of 616c 

Character  of 616c,  61Gh 

Collateral  for 616a 

Coat  of  making,  etc 616h,  616i 


284  INDEX  TO  FEDERAL  RESERVE  ACT. 

Federal  reserve  notes  (obligations  of  United  States) — Continued.  Paragraph. 

Daily  report  of  issue  and  withdrawal  of 616a 

Denominations  of 616h 

Deposit  by  bank  of  issue  with  Federal  reserve  agent 616f 

Description  of 616c,  616h 

Destruction  of 616c 

Examination  of  plates,  dies,  etc 616h 

Expense  for  making,  issue,   and  redemption  paid  by  Federal  reserve 

banks 616h,  616i 

Form  of 616h 

Held  for  distribution,  where 616h 

Identification  marks  on 616c,  616h 

Interest  paid  to  United  States  on  account  of 616e 

Issue  and  retirement  of,  regulated  by  board 611d,  616 

Liability  for,  may  be  reduced 616f 

Lien  on  assets 616e 

Paper  for 616i 

Penalty  for  pacing  out,  by  Federal  reserve  bank,  other  than  bank  of  issue . .  616c 

Plates,  dies,  paper,  etc 616h,  616i 

Printing  of 616h,  6161 

Purpose  of 616 

Receivable  for ^ 616 

Received  by  Federal  reserve  bank  other  than  bank  of  issue 616c 

Recommendations  concerning,  by  council 612a 

Redeemed  in  gold  on  demand 616 

Redemption  fund 616c,  616d,  616f 

Redemption  of 616,  616c,  616f 

Reduction  of,  liability  for 616f 

Reissue  of  notes  deposited  with  Federal  reserve  agent 616f 

Reserves  against 616b,  616d 

Return  to  bank  of  issue 616c 

Securities  for 616a,  616b 

Substitution  of  collateral  for 616g 

Supervision  of 611d 

Federal  reserv^e  notes  (circulating,  obligations  of  Federal  reserve  banks) 604b 

For  United  States  bonds  purchased  of  member  banks  by  Federal  reserve 

banks 604b,  618b 

For  United  States  bonds  with  circulation  pri\alege  against  which  no  cir- 
culation is  outstanding * . . .  604b,  618b 

Issued  and  redeemed  as  national-bank  notes 604b,  ^618b 

Fiscal  agent  of  United  States: 

Federal  reserve  banks  as 615 

In  foreign  countries,  dependencies 625 

Five  per  cent  redemption  fund  not  counted  as  reserve 620 

Foreign  acceptances 614 

Foreign  agencies  of  Federal  reserve  banks 614 

Foreign  branches  of  national  banks 625 

Foreign  correspondents 614 

Forfeiture  of  charter  by  national  banks  for  not  accepting  terms  of  this  act 602f 

Franchise  tax  on  Federal  reserve  banks 607 


INDEX   TO   FEDERAL   RESEEVE   ACT.  285 


Paraijraph 

General  fund  of  United  States  may  be  deposited  in  Federal  reserve  banks 615 

General  fund  of  United  States  Treasury  may  be  deposited  in  Federal  reserve 

banks 615 

General  repealing  clause 626 

General  supervision  of  Federal  reserve  banks  by  board 611j 

Gold  bonds,  30-year  3  per  cent,  without  circulation  privilege G18c 

Under  same  conditions  as  United  States  3  per  cent  without  circulation 

privilege  now  issued 618c 

Gold  deposits  for  reduction  of  Federal  reserve  notes 616f 

Gold  loans  by  Federal  reserve  banks 614 

Gold  notes,  3  per  cent,  1  year,  without  circulation  privilege 618c 

Exempt  from  taxes GlSc 

May  be  exchanged  for  30- year  3  per  cent  gold  bonds G18c,  618d 

Gold,  purchase  and  sale  of,  by  Federal  reserve  banks 612a,  614 

Gold,  redemption  fund  for  Federal  reserve  notes  to  be  in 616d 

Gold  reserve  required  for  Federal  reserve  notes 616b 

Government  deposits 613,  615 

Government  funds  to  be  deposited,  where 615 

Governor  of  Federal  Reser\'e  Board 610a 

Granting  of  application  for  Federal  reserve  notes 616e 

Gratuities  to  bank  examiners  prohibited 622a 


Paragraph. 

Hawaii,  reserve  requirements,  etc.,  for  national  banks  in 619g 

House  of  Representatives,  annual  report  of  Federal  Reser\'e  Board  to 61  Og 

Hypothecation : 

Of  Federal  reserve  bank  stock  by  member  banks  prohibited 605a 

Of  United  States  bonds  by  Federal  reserve  banks  for  gold  loans 614 


286  IKDEX  TO  FEDERAL  RESERVE  ACT. 


I. 

Paragraph 

Imports,  acceptances  on,  eligible  as  discounts  by  Federal  reserve  and  member 

banks 613b 

Incidental  powers  necessary  to  comply  with  this  act 604b 

Income  from  Federal  reserve  bank  exempt  from  taxation 607a 

Increase  of  capital  of  Federal  reserve  banks 605-605d 

Individual  liability  of  shareholders 602d 

Individual  liability  of  stockholders  of  national  banks 623 

Information  concerning  member  banks  to  be  furnished  Federal  Reserve  Board 

by  Federal  reserve  agent 621b 

Information,  examiners  not  to  disclose 622b 

Insohent  member  banks 606 

Interest  rate  for  rediscount  fixed  by  board 611b,  613c 

Interest  rate  increased  by  tax  on  deficiency  in  reserve  requirements 611c 

Interest  rates  on  Federal  reserve  notes 616e 

Invalidating  clause 629 

Investment  securities  not  eligible  for  discount  by  Federal  reserve  banks 613a 

Irrigation  bonds,  etc.,  dealt  in  by  Federal  reserve  banks 614 

Issue  of  circulating  notes  by  Federal  reserve  banks 618b 

Issue  of  Federal  reserve  notes 616,  616a 

Issue  of  gold  notes  of  United  States  in  exchange  for  certain  United  States  bonds,  618d 


INDEX   TO   FEDERAL   EESERVE   ACT.  287 


li. 

Tarn  era  ph. 

Lawful  money  deposits  for  reduction  of  liability  for  Federal  reserve  notes 616b 

Liabilities,  rights  and  powers  of  State  banks  when  member  banks 609p 

Liabilities  incurred  under  the  provisions  of  this  act 613c 

Liabilities  of  national  banks 613c 

Liability  for  Federal  reserve  notes,  reduction  of 61 6f 

Liability  of  director  of  national  banks  violating  this  act 602f 

Liability  of  stockholders: 

Of  Federal  reserve  banks 602d,  606 

Of  national  banks 623 

Lien  on  assets  amount  of  Federal  reserve  notes  first 61 6e 

Limitations,  none  on  amount  of  Federal  reserve  bank  notes 604b 

Limit  not  placed  on  amount  of  Federal  reserve  bank  circulating  notes 618b 

Limit  to  amount  of  acceptance  on  imports  and  exports 613b 

By  Federal  reserve  banks 613b 

By  member  banks 613b 

Limit  to  amount  of  gold  notes  issuable  to  Federal  reserve  banks 618c 

Limit  to  amount  of  public  stock  in  Federal  reserve  bank  held  by  one  individual, 

etc 602h 

Limit  to  amount  of  United  States  bonds  that  Federal  reserve  banks  may  pur- 
chase from  member  banks 618a 

Limit  to  maturity  of  discounts  by  Federal  reserve  banks 613a,  613b 

Liquidating  of  member  banks 605e 

Liquidating  of  Federal  reserve  banks , 607,  611h 

Loans  of  gold  by  Federal  reserve  banks 614 

Loans  on  farm  lands 624 

Loans  prohibited  when  reserve  is  short 619e 

Loans  to  bank  examiners  proliibited 622a 

Loan,  no  officer,  director,  or  employe©  to  receive  a  commission  for  any  loan 622c 


288  INDEX  TO  FEDERAL  RESERVE  ACT. 


M. 

Paragraph. 

Manager  branch  Federal  reserve  banks 603 

Market  operations  open 614 

Maturity  of  discounts  of  Federal  reserve  banks  limited 613a,  613b 

Maximum  amount  of  public  stock  in  Federal  reserve  bank  held  by  one  indi- 
vidual, etc 602h 

Meetings  of  Federal  reserve  council 612 

Member  banks  (see  also  National  banks) 601,  602b,  608,  609 

Acceptance  rediscounted  by  Federal  reserve  bank 613b 

Acting  as  agent  for  nonmember  banks,  restrictions 619d 

Alaska 602,  619g 

Application  for  membership  as,  after  organization  of  Federal  reserve  bank  605c 

Balances  in  Federal  reserve  banks,  considered  as  reserve 619f 

Bills  of  exchange — 

Acceptable 613b 

Rediscounted  by  Federal  reserve  banks 613a,  613b 

Sold  to  Federal  reserve  banks '. 614 

Capital,  amount  required  of  State  bank  to  become  member  bank 609f 

Collection  charges 618a 

Depositories  of  United  State 615 

Deposits  in  Federal  reserve  bank 613 

Deposits,  reserves  against 619-619b 

Deposits  with  nonmember  bank -. 619d 

Directors  not  to  accept  fees  for  loans 622c 

Dividends  are  not  to  be  paid  when  reserves  are  below  requirements 619e 

Drafts — 

Acceptable 613b 

Rediscounted  by  Federal  reserve  banks 613a,  613b 

Examiners 621 

Examinations  of , 621b 

Examinations  of  Federal  reserve  banfcs  on  request  of  10  member  banks 62lc 

Exchange  charges - 616k 

Hypothecation  of  stock  of  Federal  reserve  banks  prohibited 605a 

Individual  liability  of - 602d 

Insolvency  of 606 

Insurance  agent,  when  may  act  as 613c 

Limit  to  deposits  that  may  be  kept  with  nonmember  banks 619d 

Liquidation  of - 605e 

Loans  and  gratuities  to  bank  examiners  prohibited 622a 

Loans  may  not  be  made  when  reserves  are  below  requirements 619e 

Loans  on  real  estate 624 

National  banks  {see  National  banks) 602c-602f 

608 

Notes  rediscounted  by  Federal  reserve  banks 613a,  613b 

Officers  and  employees  not  to  accept  fees,  etc 622c 

Outside  continental  United  States 619g 

Prohibited  from  securing  discounts  from   Federal  reserve  banks  for  non- 
member  banks - 619d 

Provisions  for  national  banks  outside  continental  United  States  to  become . .  619g 

Real  estate,  when  bank  may  act  as  broker  in  procuring  loans  on 613c 

Refunding  United  States  bonds  securing  circulation 618,  618a 


INDEX    TO   FEDERAL   RESEIIN  K   ACT.  289 

Paragraph. 

Report  of  condition  by G09c 

Report  of  earnings  and  dividends  by (JOOc 

Reserve  recjuirements 611m,  6H>-fi20 

Reserve,  withdrawal  of,  from  Federal  reserve  banks G19e 

Reserves 619-619f 

Against  deposits G19-6l9f 

Balances  in  Federal  reserve  banks  considered  as 61 9f 

Banks  in  central  reserve  cities (i  1 9c 

Banks  in  reserve  cities GlOb 

Banks  not  in  central  reserve  or  reserve  cities 619a 

Checking  against,  in  Federal  reserve  banks 619e 

Net  balance  due  to  and  from  other  banks  considered  in  estimating 619f 

State  banks  as G09 

Withdrawal  from  Federal  reserve  bank 609e 

Deposits  with  nonmember  banks 619d 

Examinations  of 621 

Member  banks,  rights,  powers,  and  liabilities  of 609g 

Stock  in  Federal  reserve  banks 602c,  604 

605 

Transfer  of  stock  in  Federal  reserve  banks G02k,  605a 

Trust  companies  as 609 

Deposits  with  nonmember  banks 619d 

Examinations  of '. 621 

Withdrawal  from  Federal  reserve  bank 609e 

Trust  companies  in  District  of  Columbia 602b 

Members,  Federal  advisory  council 612 

Minimum  amotint  of  capital  of  Federal  reserve  banks 6021 

Mints,  Federal  reserve  notes  may  be  deposited  in GlGh 

Mortgages  on  farm  lands G24 

Municipal  securities  dealt  in  by  Federal  reserve  banks 614 

164.312°— 20 1^ 


290  INDEX   TO   FEDERAL  RESERVE  ACT. 


N. 
National  banking  associations:  Paragraph. 

Defined 601 

Examiners  of 621 

Reserve  requirements 619 

Reserve  requirements  outside  continental  United  States 619g 

National-bank  examiners  (see  also  Examiners) : 

Prohibited  from  performing  other  services  for  banks,  etc 622b 

Prohibited  from  receiving  loans  or  gratuities  from  member  banks 622a 

National  banks  (see  also  Member  banks) 601 

Administrators 611k 

Alaska 602,  619g 

Branches  in  foreign  countries  and  dependencies 625 

Capital  stock — 

Decrease  of 605d,  606 

628 

Increase  of 605a,  605d 

Charter  bonds  no  longer  required 617 

Circulation — 

Act  of  May  30,  1908,  extended 627 

Retirement  of 618 

Tax  rate  for  certain  circulating  notes  changed 627a 

Commencing  business,  pro\'i8ions  for  deposit  of  United  States  bonds  vtith 

Treasury  repealed 617 

Dependencies 619g 

Deposits,  time,  and  interest  thereon 624 

Directore'  liability 602f 

Dissolution  for  failure  to  enter  system 602f 

Executors 611k 

Foreign  branches 625 

Hypothecation  of  stock  in  Federal  reserve  banks 605a 

Liability  of 613c 

Loans  on  farm  lands 624 

Mortgages  on  farm  lands 624 

Must  become  member  banks 602b,  602e 

Notes  of — 

Liability  for  cost  of,  unaffected 616i 

May  be  retired 618,  618a 

Other  banks  may  become 608 

Outside  continental  United  States ^^% 

Penalty  for  failure  to  enter  system 602e,  602r 

Philippine  Islands 619g 

Redemption  fund  for  notes  not  counted  as  reserve 620 

Refunding  bonds 618,  618a 

Registrar  of  stocks  and  bonds 611k 

Required  to  become  member  banks 602b,  602e 

602! 

Retirement  of  circulating  notes 618,  618a 

State  banks  may  convert  to 608 

Stock  in  Federal  reserve  bank 602c,  604 

605 

Stockholders,  responsibility  and  liability 602f ,  623 

Surplus,  increase  or  decrease  of 605 

Time  deposits  and  interest  thereon 624 

Transfer  of  stock  in  Federal  reserve  banks 602k,  605a 

Trustees 611k 

National  currency  association 627 


INDEX  TO  FEDERAL  RESERVE  ACT.  29] 

Nonmember  banks:  Paragrraph. 

Alaska 619g 

Amount  of  deposits  that  may  be  kept  with  nonmember  banks  restricted 619d 

Deposits  with 619d 

Discounts  from  Federal  reserve  banks  not  allowed  through  member  banks . .  619d 
Member  banks  may  not  act  as  agents  for,  in  applj-ing  for  or  receiving  dis- 
counts from  Federal  reserve  banks 619d 

Outside  continental  United  States 619g 

Nonmember  national  hanks,  reserve  requirements 619g 

Notes: 

Federal  reserve.     (See  Federal  reserve  notes.) 

Of  State  or  political  subdivisions  thereof  dealt  in  by  Federal  reserve  banks.  614 

Rediscounted  by  Federal  reserve  banks 613a,  613b 

Treasury,  1-year  3  per  cent,  coupon  or  registered 618c 

Exempt  from  taxes 618c 

May  be  changed  for  30-year  3  per  cent  gold  bonds 618c,  618d 

Number  of  examinations  to  be  made 621 

Number  of  Federal  reserve  cities 602 


292  INDEX  TO  FEDEEAL  RESERVE  ACT. 

O. 

Paragraph. 

Obligation  of  Federal  reserve  banka  to  purchase  gold  notes 618c 

Obligations  of  Federal  reserve  banks,  circulating  notes  are 618b 

Obligations  of  United  States,  Federal  reserve  notes 616 

Officers  and  employees  of  Federal  reserve  banks 604b 

Officers  not  to  receive  fee  or  other  consideration  for  loan _ 622c 

Officers,  rate  of  interest  paid  on  deposits : - 622e 

Officers  of  Federal  reserve  banks,  suspension  or  removal  of 611f 

Open-market  operations 614 

Recommendations  by  council 612a 

Organization  certificate  of  Federal  reserve  banks 604a 

Organization  committee.     {See  Reserve  Bank  Organization  Committee.) 
Other  reserve  cities.     {See  Reserve  cities.) 


INDEX  TO  FEDERAL  RESEBVE  ACT.  293 

P. 

Paragraph. 

Panama,  reserve  requirements,  etc.,  for  national  banks  in 619g 

Paper  for  Federal  raserve  notes GI61 

Parity  maintained G20 

Par,  when  checks  and  drafts  receivable  by  Federal  reserve  banks  at G16j 

Payment  of  expenses  of  organization  committee 602n 

Payments  of  capital  stock  subscriptions 602c 

Penalties: 

Acceptance  of  fees,  etc.,  by  directors,  officers,  and  employees  of  member 

banks ". 622c 

Divulging  information  by  bank  examiners 622b 

Failure  to  make  report 609c,  609d 

Gratuities  to  bank  examiners 622a 

Loans  to  bank  examiners 622a 

Member  banks  not  national  banks  for  failure  to  comply  with  conditions, 

etc ^ 609c,  609d 

National  banks  failing  to  comply  with  provisions  of  this  act 602e,  602f 

Paying  out  Federal  reserve  notes  by  Federal  reserve  banks  other  than  bank 

of  issue 616c 

Reserve  shortage 619e 

Violation  of  section  22,  Federal  reserve  act 622f 

Violations  of  act  by  Federal  reserve  banks 61  Ih 

Period  for  which  Federal  reserve  bank  charter  is  issued G04b 

Philippine  Islands: 

Bank  in,  may  not  become  member  bank 6  I9g 

Public  funds  in  United  States  to  be  deposited  in  member  banks 615 

Reserve  requirements  for  national  banks  in 619g 

Plates,  dies,  etc.,  for  Federal  reserve  notes 616n 

Political  subdivisions,  bonds,  etc.,  dealt  in  by  Federal  reserve  banks 614 

Porto  Rico,  reserve  requirements,  etc.,  for  national  banks  in 619g 

Postal  savings  funds  to  be  deposited  in  member  banks 6 15 

Powers  of: 

Examiners 621 

Federal  advisory  council 612a 

Federal  reserve  banks 604b,  613-6 14 

Federal  Reserve  Board 611-6111 

Not  to  conflict  with  those  of  Secretary  of  Treasury 61  Of 

Reserve  Bank  Organization  Committee 602 

State  bank  as  member  bank 609g 

President  may  place  Federal  Reserve  Board  employees  under  civil  service. . .  6111 
President  of  United  States,  members  of  Federal  Reserve  Board  appointed 

by 610,  610e 

Printing  Federal  reserve  notes 616h 

Prohibitions: 

Central  reserve  city  banks  from  making  farm  loans 624 

Gratuities  and  loans  to  bank  examiners 622a 

Member  banks  limited  in  amount  of  deposits  with  and  forbidden  to  secure 

discounts  from  Federal  reserve  banks  for  normiember  banks 619d 

Members  of  Federal  Reserve  Board,  Assistant  Secretary  of  Treasury,  and 
Comptroller  of  Currency  not  to  hold  olTice  in  any  member  bank. . .  610,  610d 

National-bank  examiners  not  to  perform  other  services  for  banks,  etc 622b 

Officers  and  employees,  from  receiving  fee  for  loan 622c 

Public  funds  01  Philippine  Islands,  postal  savings,  or  any  Government 

funds  not  to  be  deposited  in  any  bank  other  than  member  bank 615 

Reserve  shortage 619e 

Restrictions  as  to  visitatorial  powers 621b 

Senators  and  Representatives  not  allowed  to  be  members  of  Federal  Re- 
serve Board  or  director  of  Federal  reserve  bank ()04d 

Transacting  business  by  Federal  reserve  bank  until  authorized  by  Comp- 
troUer 604b 


294  INDEX  TO  FEDERAL  RESERVE  ACT. 

Paragraph. 

Profits,  iindivided,  limit  to  liability  of  national  bank  not  to  include 613c 

Pro\Tsions  for  national  banks  outside  continental  United  States  to  bec;ome 

member  banks 619g 

Public  dues,  Federal  reserve  notes  receivable  for 616 

Public  Federal  reserve  bank  stock 602g 

Amoimt  of,  limited  to  any  one  individual  or  corporation 602h 

Liability  of  holders  o^ ()02d,  602g 

Par  value  of 602g,  605 

Payment  for 002c,  602g 

Tax  free 607a 

Transfer  of 602h 

Voting  power,  none 602j 

Purchase  of: 

Bills  of  exchange  from  member  banks 614 

Gold  notes  by  Federal  reserve  banks 618c 

United  States  bonds  by  Federal  reserve  banks 618a 


Q. 

Paragraph. 
Qualification  of  examineis 621 


INDEX   TO   FEDERAL   RESERVE   ACT.  295 

R. 

Parapraph. 

Rate  of  taxation  on  "additional  currency  " fi27a 

Rates  of  discount (iilb,  6Uc,  014 

Rates  of  interest  on  Federal  reserve  notes 616e 

Real  estate  loans G24 

Reclamation  bonds,  etc.,  dealt  in  by  Federal  reserve  bank G14 

Redemption  fund: 

In  United  States  Treasury  for  Federal  reserve  notes G16c,  616d,  016! 

Not  counted  aa  reserve  (5  per  cent,  of  national  banks) 020 

Of  Federal  reserve  notes G18b 

Redemption  of  Federal  reserve  bank  circulating  notes 618b 

Rediscount  by  Federal  reserve  banks: 

Acceptances G13b 

Bills  of  exchange 013a 

Bills  receivable 613a 

Drafts 013a 

Notes .' 013a 

Paper  discounted  by  other  Federal  reserve  banks 01  lb 

Paper,  rediscounted,  as  collateral  for  Federal  reserve  notes 010a 

Recommendations  by  council 012a 

Regulations  by  board 611b,  613c 

Reduction : 

Of  capital  of  Federal  reserve  bank 605,  605d,  606 

Of  liability  for  Federal  reserve  notes 616f 

Refunding  bonds 618-018c 

Registrar  of  stock  and  bonds,  national  bank  as Ollk 

Regulations : 

For  Federal  reserve  notes Gild 

For  transfer  of  funds  and  charges  therefor  among  Federal  reserve  banks 01  Ok 

For  transfer  of  public  stock  in  Federal  reserve  banks 002k 

To  be  prescribed  by  organization  committee 002b 

Reissue  of  Federal  reserve  notes  deposited  mth  Federal  reserve  agent 01  Of 

Rejection  of  application  for  Federal  reserve  notes 01  Oe 

Removal  or  suspension  of  officer  or  director  of  Federal  reserve  bank 01 1  f 

Reorganization  of  F'ederal  reserve  banks (>  1 1  b 

Repealing  clause,  general 020 

Report  of  board  to  House  of  Representatives OlOg 

Report  of  condition  by  Federal  reserve  banks,  weekly Oil  a 

Report  of  condition  by  member  banks 609c> 

Report  of  earnings  and  dividends  by  member  banks G09r 

Reports: 

Of  examination 021 

Of  foreign  branches  of  national  banks 025 

Representatives  not  allowed  to  become  members  of  Federal  Reserve  Board  or 

directors  of  Federal  reserve  banks 604d 

Requiring  national  banks  to  become  member  banks 602b 

Reserve  banks  held  to  mean  Federal  reserve  banks 001 

Reserve  bank  organization  committee 002 

Admission  of  banks  other  than  national  banks 009,  009a 

Allota  stock  of  Federal  reserve  banks  to  United  States G02i 

Appropriation  for  expenses  of 002n 

Certificates  showing  districts  to  be  filed  ^vith  Comptroller 004 

Designates  Federal  reserve  cities  and  districts 002,  002a 

Exercises  jiowera  of  chairman  of  Federal  Reserve  Board   until  such  is 

appointed 004.1,  004e.  004h 

General  powers  of 602a,  002n 

How  constituted 002 

Majority  a  quorum 602 

Offers  stock  of  Federal  reserve  bank  to  public <'02g 

Organizes  each  Federal  reserve  bank 002a 


296  IXDEX  TO  FEDERAL  EESERVE  ACT. 

Paragraph. 

Reserve  cities 602m 

Cash  reserve  required 619b 

Distribution  of  reserve 619b 

Federal  Reserve  Board  to  control 611e 

Number  may  be  increased  or  decreased 611e 

Reserve  requirements 619b 

Reserve  that  may  be  held  with,  by  banks  elsewhere  than  in  reserve  cities.  619a 

Reserve  districts.     {See  Federal  reserve  districts.) 

Reserve  requirements  of  Federal  reserve  banks' 

Against  deposits 616b 

Against  Federal  reserve  notes 616b,  616d 

Suspension  of,  by  board 611c 

Tax  on  deficiency  in 611c 

Reserve  requirements  of  member  banks 619-619f 

Banks  in  central  reserve  cities 619c 

Banks  in  reserve  cities 619b 

Banks  not  in  central  reserve  or  reserve  cities 619a 

Country  banks 619a 

Central  reserve  cities 619c 

Estimate  of 619f 

Redemption  fund  not  counted  as  reserve 620 

Recommendations  by  council 612a 

Reserve  cities  other  than  central 619b 

To  be  held  with  Federal  reserve  banks 619d 

■^Tien  effective 619 

Reserve : 

That  may  be  held  with  member  banks 619a,  619b 

Withdrawal  of,  from  Federal  reserve  banks 619e 

Reserves,  tax  on  deficiency  in 611c 

Increase  rates  of  interest  and  discount 611c 

Restriction,  ^dsitatorial  powers  limited 621b 

Retirement  of: 

Federal  reserve  notes 611d 

National-bank  notes 618,  618a 

Revenue  bonds  of  State  or  political  subdivisions  thereof  dealt  in  by  Federal 
reserve  banks 614 

Rights  of  State  bank  when  member  bank 609f 


INDEX  TO  FEDERAL  RESERVE  ACT.  297 

S. 

Paragraph. 

Safeguarding  assets  of  Federal  reserve  banks 61  li 

Salaries: 

Of  examiners C21a 

Of  Federal  Reserve  Board  employees 6111 

Of  members  of  Federal  Reserve  Board 610 

Salary : 

Director  Federal  reserve  bank 604g 

Federal  reserve  agent 604f 

Savings  accounts  as  time  deposits 619 

Seal  of  Federal  reserve  bank 604b 

Secretary'  of  Agriculture,  member  of  Reserve  Bank  Organization  Committee...  602 
Secretary  of  Tre^ury: 

Amount  of  redemption  fund  for  Federal  reserve  notes  determined  by 616d 

Assistant,  restrictions  on,  subject  to  term 610 

Circulating  notes  of  Federal  reserve  banks,  form  to  be  prescribed  by 618b 

Chairman  of  Federal  Reserve  Board 610c 

Deposit  of  Government  funds  upon  direction  of 615 

Deposit  of  gold  coin  or  certificates  to  be  received  when  tendered  by  Fed- 
eral reserve  bank  or  agent 616m 

Earnings  from  Federal  reserve  banks  to  be  used  under  regulations  pre- 
scribed by 607 

Examiners'  appointment  to  be  approved  by 621 

Gold  notes  and  bonds  issued  in  exchange  for  certain  United  States  bonds 

by 618c,  618d 

Maintaining  of  parity 626 

Member  of  Federal  Reserve  Board 610 

Member  of  Reserve  Bank  Organization  Committee 602 

Payment  of  expenses  of  Organization  Committee  to  be  approved  by 602n 

Plates,  dies,  etc.,  for  Federal  reserve  notes  engraved  by  direction  of 616h 

Powers  heretofore  vested  in,  unchanged ." 610f 

Redemption  fund  for  Federal  reserve  notes  controlled  by 616c 

Redemption  fund  required  by 615 

Strengthening  gold  reserves 626 

Section  5154,  United  States  Revised  Statutes,  amended 608 

Section  5202,  United  States  Revised  Statutes,  amended 613c 

Securities: 

Dealt  in  by  Federal  reserve  banks 614 

Purchase  and  sale  of,  recommended  by  council 612a 

Security: 

For  Federal  reserve  notes 616a,  616b 

For  gold  transactions 614 

Senate,  members  of  Federal  Reserve  Board  to  be  confirmed  by 610 

Senators  and  Representatives  not  allowed  to  be  members  of  Federal  Reserve 

Board  or  officers  or  directors  of  Federal  reserve  banks 604d 

Shareholders  of  Federal  reserve  banks,  liability  of 602d,  606 

Short  title,  "Federal  Reserve  Act" 600 

Special  examination  of  foreign  branches  of  national  banks 625 

State  banks  as  member  banks 601 ,  609,  609d 

Amount  capital  required  to  become  member  bank 609f 

Deposits  with  nonmember  banks 619d 

Examinations  of 621 

Requirements  precedent G09a 

Requirements  subsequent 609b,  609c 

Withdrawal  from  membership  in  Federal  reserve  bank 609e 

Subscription  to  stock 609 

Surrender  of  privileges G09d 


298  INDEX  TO  FEDERAL  RESERVE  ACT. 

Paragraph 

State  banks  may  become  national  banks 608 

State  revenue  bonds,  warrants,  etc.,  dealt  in  by  Federal  reserve  banks 614 

Statement  of  condition  of  Federal  reserve  banks,  weekly 611a 

Strengthening  gold  reserves  of  the  United  States 626 

Stock  of  Federal  reserve  banks.     (See  Capital  stock.) 

Stockholders  of  Federal  reserve  banks,  liability  of 602d,  606 

Stockholders  of  national  banks,  responsibility  and  liability  of 602f,  623 

Subscription  to  capital  stock  of  Federal  reserve  banks: 

After  organization  of  Federal  reserve  banks 605b 

By  banks 602c,  604 

By  public 602g 

By  State  banks 604,  609,  609a 

By  trust  companies 604,  609,  609a 

By  trust  companies  in  the  District  of  Columbia 602c,  604 

By  United  States 602i 

Substitution  of  collateral  for  Federal  reserve  notes 616g 

Sub  treasury ,  Federal  reserve  notes  may  be  deposited  in 616h 

Succession  of  Federal  reserve  banks 604b 

Suits  against  national  banks  not  complying  with  terms  of  this  act 602f 

Suits  by  or  against  Federal  reserve  banks 604b 

Supervision  of: 

Federal  reserve  banks  by  board 611j 

Federal  reserve  notes 611d 

Siu-plus  funds  of  Federal  reserve  banks 607 

Free  from  taxation 607a 

On  dissolution  or  liqmdation 607 

Suspension: 

Of  Federal  reserve  banks 611h 

Of  reserve  requirements  by  Federal  Reserve  Board 611c 

Or  removal  of  officers  or  directors  of  Federal  reserve  banks 6111 


INDEX   TO   FEDERAL   RESERVE   ACT.  299 


T. 

Taxes:  Paraj^raph. 

Federal  reserve  banks  free  from,  except  on  real  estate 607a 

Federal  reserve  notes  receivable  for 616 

For  paying  out  Federal  reserve  notes  by  bank  other  than  bank  of  issue 616c 

Franchise,  on  Federal  reserve  banks 607 

Gold  notes,  1  year,  3  per  cent,  without  circulation  privilege,  free  from 618c 

Income  on  capital  stock  and  surplus  of  Federal  reserve  banks  free  from. . .  607a 

On  deficiency  in  reserve  requirements 611c 

Rates  of,  for  certain  circulating  notes  of  national  banks,  changed 627a 

Term  of  office  for  directors  of  Federal  reserve  banks 604d,  604i 

Time  deposits  defined 619 

Time  deposits  in  national  banks 624 

Title  "Federal  reserve  act" 600 

Transfer  of  Federal  reserve  stock 602h,  602k,  605a 

Transfer  of  national  bank  stock,  effect  of,  on  liability  of  stockholder 623 

Treasiirer  of  United  States: 

Application  to,  for  retirement  of  circulating  notes  by  member  banks..  618,  618a 

Expenses  of  organization  committee  payable  by 602n 

Federal  reserve  notes  received  by 616c 

Quarterly  report  to  Federal  Reserve  Board  of  applications  to  sell  bonds. . .  618a 
Treasury  Department: 

Federal  reserve  notes  redeemable  at 616 

Federal  reserve  notes  may  be  deposited  in 616h 

Treasury  gold  notes  issuable  to  Federal  reserve  banks  in  exchange  for  certain 

United  States  bonds 618c,  618d 

Trust  companies: 

As  member  banks.     {See  State  banks  as  member  banks) 601,  602b,  608,  609d 

In  District  of  Colunabia 602b 

(Member)  examinations 621 

Withdrawal  from  membership  in  Federal  reserve  bank 609e 

Trustees,  national  banks  as 611k 


300  INDEX  TO  FEDERAL  RESERVE  ACT, 


u. 

Uiiited  States:  Paragraph, 

Applications  to  sell  bonds 618 

Deposits  in  banks 615 

Earnings  of  Federal  reserve  banks  accruing  to 607 

Federal  reserve  notes,  obligations  of 616 

Treasurer,  quarterly  report  to  Federal  reserve  bank  of 618a 

United  States  bonds  {see  also  Bonds,  United  States): 

Charter  requirements  for  national  banks  repealed 617 

Dealings  in,  by  Federal  reserve  banks 614 

Discount  by  Federal  reserve  bank  of  paper  secured  by  United  States  bonds 

issued  since  April  24,  1917 611m 

Hypothecation  of,  for  gold  by  Federal  reserve  banks 614 

Refunding 618-618c 

Purchase  of,  by  Federal  reserve  banks 618a 

Thirty-year  3  per  cent  gold,  exchanged  for  1-year  3  per  cent  Treasury 

notes 618c,  618d 

Twos  exchanged  for  1-year  3  per  cent  gold  notes 618c 

Twos  exchanged  for  30-year  3  per  cent  gold  bonds 618c 

United  States  deposits  of  Government  funds 613,  615 

United  States  Federal  reserve  bank  stock 602i 

Unpaid  dividends,  limit  to  liability  of  national  banks  not  to  include 613c 

Undivided  profits,  limit  to  liability  of  national  banks  not  to  include. ........  613c 


INDEX  TO  FEDERAL  RESERVE  ACT.  301 


V. 

Parafn^aph. 

Vacancies  in  membersliip  of  Federal  Reserve  Board GlOe 

Vice  governor  of  Federal  Reserve  Board GlOa 

Violation  of  provisions  of  act 602f,  609d 

Visitatorial  powers  over  banks  restricted 621b 

Vote  required  to  convert  State  bank  to  a  national  bank 608 

Voting  power  of  Federal  reserve  bank  stock 602j,  604e 


W. 

Warrants  of  State  or  political  subdivisions  thereof  dealt  in  by  Federal  reserve 

banks 614 

Weekly  statement  of  condition  by  Federal  reserve  banks 611a 

Withdrawal  from  membership  in  Federal  reserve  bank  by  State  bank  or  trust 

company 609e 

Withdrawal  of: 

Collateral  for  Federal  reserve  notes 616g 

Of  reserve  from  Federal  reserv'e  banks 619e 

Worthless  assetfl  of  Federal  reserve  banks  to  be  written  off 611g 


INDEX  TO  SECTIONS  OF  REVISED  STATUTES. 


Section. 


324 

325 

326 

327 

328 

323 

330 

331 

332 

333 

330 

736 

884 

885 

3408 

3411 

3412 

3413 

3414 

3415 

3416 

3417 

3583 

3584 

3585 

3586 

3587 

3588 

3589 

3590 

3620 

3640 

3641 

3642 

3643 

3644 

3645 

3646 

3647 

3648 

3649 

3701 

302 


Page. 


11 
11 
12 
12 

12 

13 

13 

13 

13 

13 

181 

182 

182 

182 

182 

182 

183 

183 

183 

184 

184 

184 

185 

186 

186 

186 

186 

186 

187 

187 

188 

42 

42 

42 

42 

42 

42 

42 

42 

42 

42 

185 


Section. 


3847 
4046 
5133 
5134 
5135 
5136 
5137 
5138 
5139 
5140 
5141 
5142 
5143 
5144 
5145 
5146 
5147 
5148 
5149 
5150 
5151 
5152 
5153 
5154 
5155 
5156 
5157 
5158 
5159 
5160 
5161 
5162 
5163 
5164 
5165 
5166 
5167 
5168 
5169 
5170 
5171 
5172 


Page. 


188 
188 
20 
20 
20 
21 
32 
32 
32 
33 
33 
34 

34, 177 
34 
35 
35 
40 
40 
40 
40 
40 
41 
42 

43, 131 
44 
44 
50 
50 

51, 156 
51 
52 
52 
53 
53 
53 
53 
54 
58 
59 
59 
59 
61 


Section. 

Page. 

5173 

61 

5174 

62 

5175 

62 

5176 

62 

5177 

62 

5178 

63 

5179 

63 

5180 

63 

5181 

63 

5182..... 

63, 187 

5183 

63 

5184 

64 

5185 

64 

5186 

65 

5187 

65 

5188 

66 

5189 

66 

5190 

70 

5191 

72 

5192 

73 

5193 

80 

5194 

80 

5195 

80 

5196 

80 

5197 

80 

5198 

81 

5199 

81 

5200 

81 

5201 

83 

5202 

83, 146 

5203 

84 

5204 

84 

5205 

84 

5206 

85 

5207..... 

85 

5208 

86 

5209 

87 

5210 

90 

5211 

90 

5212 

91 

5213 

92 

5214 

92 

Section. 


5215 
5216 
5217 
5218 
5219 
5220 
5221 
5222 
5223 
5224 
5225 
5226 
5227 
5228 
5229 
5230 
5231 
5232 
5233 
5234 
5235 
5236 
5237 
5238 
5239 
5240 
5241 
5242 
5243 
5413 
5414 
5415 
5430 
5431 
5432 
5433 
5434 
5437 
5488, 
5497 


Page. 

93 
94 
94 
94 
95 
99 
99 
100 
100 
101 
102 
102 
103 
103 
104 
104 
104 
105 
105 
105 
106 
106 
106 
107 
111 
112, 161 
113 
113 
113 
191 
192 
192 
192 
193 
194 
194 
194 
194 
191 
191 


o 


UNIVERSITY  OF  CALIFORNIA  AT  LOS  ANGELES 

THE  UNIVERSITY  LIBRARY 
This  "book  is  DUE  on  the  last  date  stamped  below 


Form  L-9 
aOm-1, •41(1122) 


J3 


HG 

^.gs^iJ.  S.  

^.5 5  c4-ftf.utes.  etc. -_ 
-j_920  The  National- 

bank  act-^as-^  — 

amende  d< 


000  552  655 


HG 

2547 

A55 

1920 


